Granules

Integrated mid-cap pharma company, Granules India’s focus on operational efficiency lead to 24% QoQ rise in consolidated EBITDA to Rs. 64 crore for first quarter for FY16, despite 2% QoQ decline in revenues to Rs. 346 crore. Thus, company’s consolidated net profit jumped 21% QoQ to Rs. 27 crore, expanding net margin to 7.8% from 7.0% in FY15.  

Company is strengthening its footing towards introduction of new molecules to expand product portfolio. Besides, its  Gagillapur facility in Telangana is undergoing trial runs, which will begin contributing to revenues during the year, augmenting topline further. Both these factors bode well for the coming quarters.

Company is also calling for an EGM to seek shareholder approval to allot 1.87 crore warrants on preferential basis to promoter group, which indicates promoter confidence in the company. As of 30-6-15, promoters held 48.47% in the company.  

Given the excellent quarterly results, share made a new 52 week high of 104.90 on NSE, immediately on announcement of results. At a PE multiple of 18 times, share is still valued attractively, given the rich valuation commanded by other fast growing pharma companies.