11 GRANULES share price target reports by brokerages below. See what is analyst's view on GRANULES share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
GRAN has done well with 15% CAGR in revenue and an EPS growth of 20% over FY15-19. In last three-four years, GRAN has heavily invested in new capacities and enhance capabilities in finished dosage for longer term growth. We think the current P/E of 8.2x FY21E EPS is at a discount to its intrinsic value, considering strong revenue growth coupled with improving profitability, we believe this valuation gap to narrow down. With focus on deleveraging balance sheet, divestments in joint venture and improving return ratios, we expect stock to trade in its 3-years average one year forward multiple of ~13-14x. We assume earnings CAGR of ~24% over FY19-21E, resulting EPS of Rs12.9/14.4 for FY20/21E respectively.
Given the success of Granules to integrate its production vertically whereby enabling sales of high margin finished products at a greater quantity, we expect consolidated revenue/PAT to grow at 19%/11% Cover FY20/21E. Considering the lower valuations and improving product profiles, we expect earnings to remain healthy in the long term and change the rating to Accumulate from Buy with a revised target price of Rs137 at 9x FY21E EPS.
We maintain BUY on Granules following yet another quarter of robust YoY growth driven by expanded capacities. EBITDA margin at 19.9% was 300bps above estimates, despite a 5% miss on revenue. Our TP is unchanged at Rs 170 (12x FY21E EPS).
Company has guided for 20% topline and 25% bottom-line growth for the next three years, primarily driven by ramp-up of utilization levels across the expanded capacities for various key molecules, and new launches in the US market. Overall margins are expected to improve on the back of better product mix.Near-term catalyst: Approval of filed ANDAs, any further reduction in pledge shares, and approval of API plants from key regulators.Key risk: Higher-than-expected pricing pressure, raw material cost inflation and adverse currency movement.We maintain a BUY with a target of Rs. 107
We expect consolidated revenue to grow at 20% CAGR over CY19-21E led by more momentum in the US. We also increase our FY20E revenue and PAT estimates by 10%/18% on improving utilization rates. Considering the lower valuations, management’s focus on improving debt profile and successful passing of raw material costs, we expect earnings to remain healthy in the long term and maintain the Buy rating with a revised target price of Rs127 at 10x FY21E EPS.
We raise our FY20/21 EPS estimate by 2.5%/4.3% to INR10.5/INR12.7 to factor in growth in the formulation business and enhanced API opportunity. We continue valuing GRAN at 13x 12M forward earnings to arrive at a TP of INR150 (prior: INR139). We re-iterate our Buy rating, as growth drivers appear to be in place to deliver 17% earnings CAGR over FY19-21. The improvement in asset turnover, the gradual expansion in margins and the completion of capex phase are likely to drive the return ratios as well over the next 2-3 years.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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