- 17 May 2023
- ICICI Securities
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GRANULES INDIA REPORTS GROWTH IN TERMS OF REVENUE LED BY HIGHER API SALES
GRANULES - 506 Change: 3.15 (0.63 %)News: Revenues grew 16.1% YoY to Rs 1195.5 crore, driven by increased sales in US and European markets. On the segmental front, API showed growth of 48% YoY, which came in at Rs 366.4 crore. Formulations showed an up move of 16% YoY Rs 611.7 crore. PFI de grew 15% YoY Rs 217.4 crore. Gross margins came in at 47.8% in Q4FY23 against 48.9% in Q4FY22. Margins were impacted due to higher mix of API sales coupled with price erosion in developed markets. EBITDA grew 18% YoY to Rs 228.1 crore whereas margins expanded 40 bps YoY to 19.1% but below I-direct estimates of 20.8%. Higher sales of API and lower FD sales in the US led to divergence in margins. PAT grew 9% YoY to Rs 119.6 crore during the quarter.
Views: Miss on the margins front was attributable to higher API sales and pricing pressure in some formulations. The company has announced an aggressive capex of | 700 crore, which includes manufacturing Paracetamol and Metformin KSMs and intermediates via green route. We continue to monitor the progress on the margins front as well as execution of the capex. The company's endeavour is to target 50% global market share in Paracetamol and a significant global market share in Metformin with full backward integration via the green route.
Impact: Positive