Granules India (Granules) is an integrated Indian pharmaceutical company. It manufactures Finished Dosages (FDs), Pharmaceutical Formulation Intermediates (PFIs) and Active Pharmaceutical Ingredients (APIs). It caters to more than 300 clients (including some of the prominent branded and generic players) across 75 nations.
View and Valuation
We expect revenue and PAT to grow at a CAGR of 20.8% & 39.8% respectively over FY16-18E. Further, EBITDA margins are expected to improve by 270bps on account of ramp up in PFIs production and limited competition launches. Hence, we initiate Granules with a BUY rating with a TP of Rs.166 based on 15.5x FY18E EPS.