- 10 Aug 2022
- ICICIdirect Research
GRANULES INDIA REPORTS REVENUE UPTICK IN Q1, MARGINS IMPROVING
GRANULES - 576 Change: 8.70 (1.53 %)News: Revenues grew 20% YoY to Rs 1020 crore, driven by YoY growth of 38% in PFI to Rs 237 crore and 5% growth in API to Rs 234 crore. Formulations grew 21% YoY to Rs 549 crore. EBITDA margins fell 296 bps YoY to 20.7% due to lower gross margins (down 459 bps YoY). EBITDA grew 5% YoY to Rs 211 crore and PAT grew 6% YoY to Rs 128 crore. Board of directors has approved a buyback of 0.6 crore equity shares at a price of Rs 400 per equity share for an aggregate maximum amount of Rs 250 crore.
View: Granules revenues growth in this quarter was in-line with our estimates mainly driven by volume growth in most of the markets and also on account of new launches in US. EBITDA margins were better than our estimates and are recovering sequentially (up 204 bps QoQ) as revenue share from Europe increased to 22.5% offsetting some price erosion in US while share of non-core molecules also increased to 18% in Q1FY23. Granules has also approval from the Department of Pharmaceuticals (DOP) under PLI scheme to manufacture Dicyandiamide (DCDA). Granules remains a decent player with clear vision to play on its strength of economies of scale and gradual expansion into more complex products/forms to improve margins.
Impact : Positive.