You are here: Home » Markets » News
Business Standard

Granules India hits fresh record high of Rs 384; rallies 24% in 2 weeks

Analysts expect launches in formulations and additional capacity in pharmaceutical formulation intermediate (PFIs) to be key growth drivers

Granules India | Buzzing stocks

SI Reporter  |  Mumbai 

The government is now trying to understand how long it will take before the drug’s production can start in India
Q1FY21 turned out to be the best-ever quarter for the company as it posted highest ever GPM and EBITDA margin

Shares of hit a fresh record high of Rs 383.70, up 5 per cent on the BSE, in the intra-day trade on Thursday, gaining 24 per cent in the past two weeks on expectation of strong earnings going-ahead. In comparison, the S&P BSE Sensex was down 0.94 per cent during the same period.

The first quarter (April-June) of FY21 turned out to be the best-ever quarter for the company as it posted highest ever GPM (gross profit margin) and EBITDA (earnings before interest, taxes, depreciation, and amortization) margin in the company’s history.

This was on the back of gain in market share, new formulation launches and product optimisation. In the wake of continued good performance, analyst at KRChoksey Shares and Securities has positively revised EBITDA/PAT estimates for FY21E by 14.0 per cent/14.7 per cent.

is engaged in manufacturing of Active Pharmaceutical Ingredient (API), Pharmaceutical Formulation Intermediate (PFI) and Finished Dosage (FD).

On August 22, had announced that its subsidiary company Granules Pharmaceuticals Inc had received approval from the US Food & Drug Administration (US FDA) for Ramelteon Tablets 8 mg, a bioequivalent to the reference listed drug product (RLD), Rozerem Tablets, 8 mg, of Takeda Pharmaceuticals USA.

"Ramelteon Tablets are used for the treatment of insomnia characterised by difficulty with sleep onset. Ramelteon Tablets had US sales of approximately $33 million MAT for the most recent twelve months ending in June 2020 according to IQVIA Health," it said.

Analysts expect Granules India to post revenue growth of 15.7 per cent/15.5 per cent in FY21E/FY22E on the back of new product launches in the US from company’s US subsidiary (Granules Pharmaceuticals Inc) and rising contribution from FD with company’s focus on higher value and higher margin business segments of FD.

"The transformation from a pure API company to a front-end formulator has sweetened the company's operating profile. Besides product rationalization, benefits of backward integration and higher utilization of existing facilities are likely to boost margins. The strong demand for key products (Metformin, paracetamol, ibuprofen) due to Covid-19 has translated to a robust Q1 for Granules. Ahead, we expect launches in formulations and additional capacity in PFIs to be key growth drivers," analysts at Anand Rathi Share and Stock Brokers said company update.

At 02:57 pm, Granules India erased its early morning gains and was trading 0.6 per cent lower at Rs 363, as compared to 1.5 per cent rise in the S&P BSE Sensex. A combined 6.2 million shares had changed hands on the counter on the NSE and BSE till the time of writing of this report.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, September 10 2020. 14:47 IST