BSE Code: | NSE Code: | ISIN: | Sector:
Research Report Detail
|Report Date||Call||Price@Call||Target Price
|Current Status||Time Horizon|
|Open|| Long (1Y)
HDFC Securities maintains buy on Granules India
After several quarters of muted top-line growth, GRAN reported 10.2% growth in 1QFY18. Top-line came in at Rs 3.78bn, 5% ahead of estimates. The EBITDA margin at 20.3% was up 40bps YoY, in-line with expectations. While the gross margin expanded around 330bps YoY owing to the improving business mix, higher operating expenses prevented further expansion in the EBITDA margin. PAT was Rs 368mn, down around 5% YoY, largely owing to lower other income (Rs 4mn vs Rs 30mn YoY) and a higher tax rate. We continue to believe that strong top-line growth will kick in starting 2HFY18. Mgt expects around 15-20% top-line growth, and around 25% profit growth in FY18, on the back of expected ANDA approvals for the US market, core business capacity expansion kicking in and a continued ramp-up in the Omnichem JV. However, the full impact of these factors is likely to be visible only from FY19.