Granules India Limited - Technofunda | Globe Capital Market LTD.
Granules India Limited – Technofunda

Given the strong growth prospects over the long term and upward revision of capex spends to Rs.1000 crore

Overview and Recommendation


Given the strong growth prospects over the long term and upward revision of capex spends to Rs.1000 crore, which could enable Granules to support the top line growth.


Granules India Limited (GIL) is a large-scale vertically integrated Pharmaceutical company founded in 1991 manufacturing Active Pharmaceutical Ingredients (API), Pharmaceutical Formulation Intermediates (PFI) and Finished Dosages (FD) products. We have Vast international reach and sell our products in global markets including United States of America, Canada, Latin America, Europe, Asia Pacific, and India. Over the years, its focus has been mainly to convert its API and PFI centric business to an end to end integrated, predictable and sustainable producer of its own formulation products mainly for US market and create a sizeable basket of products in multiple therapeutic areas to establish the brand value of Granules as a sustainable formulation player.

Key Triggers:

Strong Q4FY21 Earning performance – The Company reported a strong performance for Q4FY21, with adjusted PAT largely in line with estimates. Sales for the quarter grew sturdily by 33.2% Y-o-Y to Rs.799 crore led by a strong double-digit growth of 84.4% Y-o-Y and 34% Y-o-Y in PFI (Pharmaceutical Formulation intermediates) and FD (Finished Dosages) segment respectively.

Wide Global reach – The Company has worldwide services to over 250 customers across 60+ countries. With exports comprising over 81% of total revenue.

Strong financial Growth: The Company has delivered good profit growth of 35% CAGR over last 5 years & its sales growth of 20% of last 5 years.

Valuation & View:

Given the strong growth prospects over the long term and upward revision of capex spends to Rs.1000 crore, which could enable Granules to support the top line growth.

Key Risk:

Any FDA alert would be dampener for the company.

Technical View:

Granules has witnessed steep up move from 85 to 438 levels in a short time span of 18 months. Post that, it retraced back to 295 levels which was the 38.20% Fibonacci retracement level of previous up move. At current juncture, stocks has witnessed a bullish breakout from the congestion zone (295-380 levels) of last 7 months on weekly charts.

Going ahead, we expect it to continue its prevailing uptrend. Hence, we suggest to go long in Granules as we expect it test 445 levels in near term.


Considering both the factors fundamental & technical parameter, we recommend a ‘BUY’ in GRANULES at current level for the target price of Rs. 450 with close below stop loss of Rs. 340.


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