6 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.
Granules(Inc) is a leading generic player in the Indian pharmaceutical industry, with 2/3rd of its revenue generated from North America and Europe. Granules achieved its highest ever quarterly revenue of Rs.736cr during Q1FY21 with a YoY growth of 24%. The Finished Dosages segment grew by 35% during the quarter as the company successfully launched Colchicine tablets and Butalbital APAP caffeine tablets in the U.S The company reduced its Promoter pledge percentage from 37.6% to 8.7% through the recent buyback process. We expect net profit to grow at a CAGR of 22% over FY20-FY22E on the back of new launches, entry into new geographies as well as its cost optimization measures. Hence we value Granules at 15x FY22E EPS and reiterate a “Buy” rating, with a target price of Rs.327
We expect consolidated revenue/PAT to grow at a CAGR of 19%/16% over FY20 -22E given their successful implementation of vertical integration. Management has indicated that they will be launching another 8-9 products in FY21. Considering the lower valuations and improving product profiles, we expect earnings to remain healthy in the long term and upgrade the rating to Buy with a revised target price of Rs175 at 9.5x FY22E EPS.
The management is delivering the guidance as of now in 9M with consistent revenue and earnings growth. Promoter have announced that the recent Buyback would lead to meaningful reduction of the pledge share post the closure of buyback (expect less than 5% pledge share from current 37% pledge). EBITDA margins have seen the benefit from improving product mix and operating efficiencies with better capacity utilisations. Also, the launch of own label products in US, new facility commenced at Vizag and Metformin capacity will contribute to the margins. Considering the above consistent improvements, we have increased our earnings by 15% in FY21E and introduce our FY22E along with rolling over to FY22E for valuations. Valuing the stock at 10x FY22E EPS, maintaining BUY rating with revised target price of Rs 205. At CMP of Rs140., GIL is trading at 8.6x FY21E EPS of Rs16.3 and 6.8x FY22E EPS of 20.5.
Granules India’s topline continues to be boosted by strong traction in formulations. Its Q3 FY20 sales grew 11% to `7bn. Formulations (FD) grew 23% to Rs 4bn, PFI sales were up 8% to `1bn while APIs declined slightly (3%) to `2bn. The higher contribution from formulations and softening API prices helped to a record 23% EBITDA margin. Adjusted for an impairment charge of Rs 320m on the Biocause JV, PAT shot up 44% to Rs 871m. We expect revenue and PAT CAGRs over FY19-22 of respectively ~17% and ~25%. We maintain our Buy recommendation and raise our target to Rs 181 (earlier Rs 172).
We expect earnings CAGR of 26% over FY19-22, led by 19% CAGR in formulation revenue and 490bp EBITDA margin expansion (with an increased share of better-margin products). We continue valuing GRAN at 9x 12M forward earnings to arrive at a TP of INR165 (prior: INR145). Maintain Buy.
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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