Granules India
Value: integrated API-formulations
- Last close
- ₹866.75
- 29 Sept 2026 · reference
- 1D · 1M
- +1.8% · +3.6%
- price-only
- Weight
- 0.7%
- 31 Jul 2026 · Aug rank —
- Thesis review
- 8 Sep 2026
- Why We Own, p44
Approved description
Granules is a vertically integrated maker of high-volume generics (paracetamol, metformin, ibuprofen, guaifenesin) spanning APIs, pharmaceutical formulation intermediates (PFI) and finished dosages (FD). Q1FY27 revenue mix: FD 74%, API 13%, PFI 9%, CDMO 4%; North America 72%, Europe 16%, RoW 12%. Complex generics are now 50% of the FD portfolio (39% a year ago) and it ranks ~27th by US generic prescriptions (FY26). Senn Chemicals (Switzerland, acquired Apr-2025) gives it a peptide CDMO platform.
- 01Mix shift is real: complex generics 50% of FD (vs 39%), gross margin 65.6% and EBITDA margin 22.95% in Q1FY27 vs 20% a year ago; consensus expects 23% p.a. earnings growth.
- 02Diversifying away from the US (72% of revenue): Europe +51% and RoW +56% YoY in Q1FY27 with a new EU-GMP certificate for Genome Valley.
- 03Balance sheet fixed: net debt Rs 101 cr (0.07x EBITDA, from 0.34x at FY26), OCF Rs 387 cr in one quarter, ROCE 18%.
- 04Pipeline: 25 ANDAs pending (USD 40 bn addressable brand value), second sole FTF (sodium oxybate ER, USD 267 mn brand); GPI Chantilly cleared with VAI in Apr-2026.
- 05Peptide CDMO via Senn targeted at USD 50 mn revenue at 30%+ EBITDA margin; CDMO already 4% of sales, +106% YoY.
Reference close, with results-period markers
- 1Q Sep-25 end · 30 Sept 2025
- 2Q Dec-25 end · 31 Dec 2025
- 3Q Mar-26 end · 31 Mar 2026
- 4Q Jun-26 end · 30 Jun 2026
Quality score, technicals and Buoyant Score
Computing the scorecard…
Latest quarter · Q Jun-26
| Line (₹ cr) | Q Jun-26 | YoY | QoQ |
|---|---|---|---|
| Net Sales | 1,477 | +22.1% | +0.4% |
| Operating Profit | 339 | +37.2% | −3.7% |
| Net Profit | 180 | +59.3% | −10.9% |
Reported vs internal estimate: internal quarterly estimates are not in the supplied package; consensus feed not licensed. YoY/QoQ per PRD §12.5 (transitions, not %, on non-positive bases).
Position and valuation context
General industrial/consumer/IT preset: growth, margins, ROCE/ROIC, working capital, FCF, net debt; P/E, EV/EBITDA.
Valuation range
No headline target on this page; the book quotes the thesis and the risk rather than a target.
What we watch
- USFDA re-inspection and closure of the Gagillapur warning letter (timing unannounced as of Jul-2026).
- Sodium oxybate ER (sole FTF) approval/launch and further complex generic approvals from the 25 pending ANDAs.
- Senn peptide CDMO scale-up toward USD 50 mn revenue; Q2FY27 results (Nov-2026) to confirm 23%+ margins.
- Gagillapur (Hyderabad) USFDA warning letter (issued 26-Feb-2025) remains active pending re-inspection; 7 of 8 sites have clean EIRs but no re-inspection date (Jul-2026).
- Concentration: North America 72% of revenue and paracetamol/metformin-type molecules exposed to US price erosion and 26% reciprocal-tariff risk flagged by analysts.
- Management stepped back from its 24-25% EBITDA margin guidance in Q1FY27; promoter holding only 38% and down ~4pp over 3 years.