Smallcap Stock Below Rs 400 To Buy: Pharma Company Get ANDA Approval For Sildenafil; 18% Upside Seen

Pharma company, Granules India will be in focus this week as the company received USFDA approval for Sildenafil for Oral Suspension, 10 mg/mL. It is bioequivalent and therapeutically equivalent to the reference listed drug (RLD), Revatio for Oral Suspension, 10mg/ml, of Viatris Specialty LLC. Brokerage Geojit has recommended accumulating on Granules for a target price of Rs 464, signaling a potential upside of over 18%.

As per the regulatory filing, Sildenafil for Oral Suspension is indicated for the treatment of pulmonary arterial hypertension (PAH) (World Health Organization [WHO] Group I) in adults to improve exercise ability and delay clinical worsening.

That being said, Granules now has a total of 63 ANDA approvals from the US FDA (61 final approvals and 2 tentative approvals).

Last week on Friday, Granules' share price ended at Rs 392.70 apiece, down by 1.74% on BSE. The company has a market cap of Rs 9,517.82 crore.

YTD, the stock however has zoomed by 23% on BSE. '

In its latest research note, Geojit said, "In H2FY24, topline reported flat growth to Rs.2,175cr. Revenue in the US grew by 11% YoY to Rs.799cr, while in Europe it declined by 8% to Rs.213cr, in Q2FY24. This was due to price erosion in the European markets and the continued impact of cybersecurity issues faced in the first quarter. EBITDA was reported at Rs.350cr, down by 23% YoY, and the EBITDA margin declined by 485bps YoY to 16%. Adj. PAT was reported at Rs.150cr (-45% YoY), due to higher
interest charges.

On the valuation, Geojit's note added, "We remain optimistic about the company's long-term profitability and growth prospects owing to new product launches, a focus on backward integration, and increased market share in existing geographies. However, delayed launches of
some of the molecules are likely to impact revenue. Therefore, we downgrade our rating to Accumulate with a target price of Rs. 464 based on 16x FY26E EPS."

Granules is a vertically integrated, high-growth pharmaceutical company headquartered in Hyderabad, India. The company manufactures Active Pharmaceutical Ingredients (API), Pharmaceutical Formulation Intermediates (PFI) and Finished Dosages (FD).

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.