Granules India Ltd. share price target

Granules (GIL) posted revenues of INR 9,968mn with 18% YoY growth, which was 5.2% below our estimate of INR 10,517mn. Revenue miss was mainly due to slower growth in the finished dosages (FD) segment. During Q3, FDs grew by 8.4% (YoY), PFIs grew by 32.4% (YoY), and API sales improved by 24.4% (YoY). GIL has witnessed an increase in key raw material costs along with higher freight costs. Despite taking price increase by renegotiation with some of its customers, continued increasing input cost and lower revenue from FD severely impacted its gross margins by 707bps (YoY), which resulted in 762bps (YoY) contraction in EBITDA margin to 17.4% (est.18.8%) in Q3FY22. The management expects to continue to pass on the RM cost increases to their customers in Q4FY22. GIL reported a PAT of INR 1009mn, which was below our estimate of INR 1192mn due to...

Granules reported a subdued increase in revenue to Rs.888cr,up 3% YoY owing to increased sale of existing products and new launches especially in the Finished Dosage particles which has resulted in an increase in topline partially offset by loss of MEIS benefit. For the quarter, EBITDA contracted to Rs.151 cr, down 41% YoY mainly due to reductions in margins of almost all products especially paracetamol due to the increase in raw materials prices. Resultantly, adj PAT declined to Rs.80.4cr from Rs.164cr, down 51% (YoY)....

Granules (GIL) posted revenues of INR 8,883mn with 3.5% YoY growth, which was 5.2% above our estimate of INR 8,446mn. Revenue beat was mainly driven by new product launches and increased market share for existing products in the finished dosages (FD) segment. During Q2, FDs grew by 18% (YoY), PFIs grew by 10% (YoY), and API sales dropped by 25% (YoY). Gross margin contracted by 706bps on account of increase in KSM prices (mainly PAP and Acetic acid prices are up by 100%150%) and loss of MEIS benefit. However, EBITDA Margin witnessed a higher impact (decline of 1286bps to 17% in Q2FY22 ) due to lower profitability in Para products and higher logistic cost and R&D expenses (5.3% vs 2.6% in Q2FY21). The management expects to pass on some of the increases to their customers from Q3FY22 onwards. GIL reported a PAT of INR 807mn, which was below our estimate of INR 1237mn driven by weak operational performance. As per management, the...

We cut our EPS estimate for FY22E/FY23E by 23%/14%, factoring in a) prolonged concerns on escalated raw material prices, particularly for Paracetamol, and b) China-led supply disruptions resulting in higher logistic costs. We value GRAN at 13x 12M forward earnings to arrive at TP of INR330. Headwinds related to raw materials are expected to ease over the medium term, and GRAN continues its effort towards building the ANDA...

Granules continued its impressive performance in Q1FY22 with total revenues growing by 16% YoY to Rs.849cr despite the myriad of challenges posed by various business scenarios in the backdrop of covid and logistics disruptions. Strong revenue share from the existing molecules and a sizeable...

increase in KSM prices (mainly PAP) and loss of MEIS benefit (~150bps). Favourable forex and Air freight collected from customers was part of Sales which was added to Gross margin in Stock Q1FY21. However, EBITDA Margin managed lesser impact (decline of 126bps to 23.7% in Q1FY22 ) CMP (INR) due to lower other expenses (-4%YoY). GIL reported a PAT of INR 1202mn, which was above our Target Price (INR) estimate of INR 1018mn driven by ordinary operational performance. As per management, the KSM BSE code supply situation is likely to improve with an increase in the number of domestic suppliers and the recommencement of supply from the Chinese source. The management has stated that it is looking to decrease the share of core molecules from 84% currently to 60% by FY25 with focusing on launching higher-margin products across different geographies....

Granules India (GRAN) delivered a better-than-expected 1QFY22 performance, led by better off-take in the Intermediates (PFI) and Finished Dosage (FD) segments. The impact of the sharp rise in key starting materials (KSM) for Paracetamol was offset by controlled opex, driving better-thanexpected profitability during the quarter. The improved availability of KSMs and new launches would further enhance the performance going forward. We marginally tweak our EPS estimate for FY22/FY23E, factoring in a) the easing of the supply situation for KSMs and b) higher logistic costs. We continue to value GRAN at 15x 12M forward earnings to arrive at TP of...

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revenues growing by 33% YoY to Rs.799cr in Q4FY21. All segments saw strong growth mainly on the back of of successful new launches, increase in market share of finished dosages, as well as customer additions for APIs and PFIs. Disruption in supply of key raw materials from China will impact operating performance in the short term The company has guided a Capex of ~Rs.1,000cr over the next 3 years as it looks to expand capacities for its key products...

GRAN delivered an in line performance in 4Q and posted its highest ever sales/EBITDA/PAT on an annual basis in FY21. This was largely led by strong traction in ingredients (PFIs) and formulations (FDs). While the company is on track to expand capacity/develop products, a sharp increase in prices of select key starting materials (KSM) may hinder its near-term performance. We lower our FY22E/FY23E EPS estimate by 11%/10% to factor in a price increase/reduced availability of KSM like para-aminophenol (PAP)/acetic anhydride and lower operating leverage. We value GRAN at 15x 12-months...