Granules India Ltd. share price target

Granules (GIL) posted revenues of INR 8445mn with 20% YoY growth, which was ~16% above our estimate of INR 7279mn. Revenue growth was mainly driven by increase in the market share of existing products, new customer additions in the API segment and increasing penetration of PFIs as a category. During Q3, FDs grew by 11% (YoY), PFIs grew by 48% (YoY) and API sales were up by 20%(YoY). Gross margin improved (300bps YoY) due to favourable product mix (larger share of FDs and PFIs) and higher capacity utilization. Subsequently, the EBITDA margin expanded by 188bps to 25.1% level was 145bps higher than our estimate supported by improved operational efficiency. As per management EBITDA margin can be sustained between 25% to 27% level as continued traction in the formulation business. GIL reported PAT of INR 1468mn, was above our estimate of INR 993mn...

Revenues grew 20% YoY to | 845 crore driven by new launches and higher market share of existing products across segments. Formulations grew 11% YoY to | 422 crore, API grew 20% to | 252 crore and PFI grew 48% to | 171 crore. EBITDA margins improved 187 bps YoY to 25.1% due to change in product mix and higher operational efficiency. EBITDA grew 29.7% YoY to | 212 crore. Adjusted PAT grew 52.8% YoY to | 147 crore. Delta vis-a-vis EBITDA was due to higher other income (one-time | 13.4 crore stimulus...

With the generic version of Focalin XR being approved, GRAN now has 30 ANDA approvals (28 final and 2 tentative). It is used for the treatment of Focalin XR and its generic equivalent had US sales of USD556m for 12- There are 5 companies having final approval for this product, other than GRAN. Accordingly, we expect price erosion of 7-10% with market share gradually building up to 10% over 12 months post the launch of the product. This could provide meaningful upside to GRANs ANDA-led Formulations GRAN has multiple growth levers, such as (a) the ANDA pipeline for US generics (with some products having limited competition opportunity), which should drive an increase in the share of formulations for developed markets, (b) enhanced reach for core molecules, and (c) reduced opex through backward integration.

Granules achieved its highest ever quarterly revenue of Rs.736cr during Q1FY21 with a YoY growth of 24%. The Finished Dosages segment grew by 35% during the quarter as the company successfully launched Colchicine tablets and Butalbital APAP caffeine tablets in the U.S The company reduced its Promoter pledge percentage from 37.6% to 8.7% through the recent buyback process. We expect net profit to grow at a CAGR of 22% over FY20-FY22E on...