ICICI Direct has given Buy recommendation for Granules India recommended buy rating on the stock with a target price of Rs 410 in its research rep with a target price of Rs. 410 in its research report issued on Oct 25, 2022
ICICI Direct’s research report on Granules India
Granules is a large-scale vertically integrated company that manufactures API, intermediates and finished dosages and has seven manufacturing facilities along with B2B & B2C marketing & distribution. • Revenue mix FY22: Formulations – 52%, API (API+PFI) – 48% • Top five products (Paracetamol, Ibuprofen, Metformin, Methocarbamol, Guaifenesin) contributed 81% to FY22 revenues.
Outlook
We maintain BUY rating on the back of 1) Focus on diversification of API portfolio, 2) Focus on margin improvement via proposed product mix changes and capex on backward integration, 3) Compelling risk-reward matrix based on FY24E earnings. Valued at Rs 410 i.e. 15x FY24E EPS of Rs 33.8.