Wednesday 30 April 2014

Granules lndia buy

Granules India is  Hyderabad based integrated pharmaceutical outsourcing manufacturer mainly in Active Pharmaceutical Ingredients (API), Pharmaceutical Formulations Intermediates(PFI) and  Finished Dosages (FD ). Company having three API manufacturing facilities located in Bonthapally,and  Jeedimetla  in Andhra Pradesh and Hubei in China.All these three facilities are approved by USFDA and other authorities like WHO ,EDQM..etc. Its API portfolio includes Paracetamol ,Ibuprofen,Metformin HCl,Guaifenesin,Methocarbamo,Oxymetazoline and Phenazopyridine HCl. Granules’ PFI facilities are located at Gagillapur and Jeedimetla both in Andhra Pradesh. Company also have six billion tablect capacity FD plant in Gagillapur. Company having strong outsourcing tie-ups with world pharma majors. Now company is moving gradually to high margin PFI and Fd segment from API .Last year Granules expanded its capacity in both these segments. Company having good R&D and got approvals for two ANDA’s in last year.Outside India, company having marketing presence in US,China,UK and Colombia.After receiving recent FDA approvals and capacity expansion company is expected to perform well going forward.Last FY , Granules posted a turnover of Rs.475 Cr and a net profit of Rs.21 Cr .With the aggressive expansion ,marketing initiatives,and introduction of new products and favorable exchange value ( about 80% of sales coming from exports.) Granules is expected to  post decent growth in coming years.It is one of the good pharma picks from small cap.

Result impact-

Granules India reported  good numbers for the quarter ended March .Company's top line is Rs.317 Cr v/s Rs.204 Cr and net profit is Rs.24 Cr v/s Rs.12 Cr .Full year EPS is Rs.37.20 v/s Rs.17.21 .Company also declared a dividend @ 35 % . Company recently acquired Actus Pharma which owns  a USFDA approved facility .Turn around of Actus Pharma and commercial operations of its joint venture with Ajinomoto Omnichem ..etc are expected to keep the growth momentum of the company in the years to come.

We recommend to buy at current market price 350 Rs. for medium to long term. 

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