Buy This Pharma Stock For Gains Up To 23%, Shares Grown From Rs 109 to Rs 304 In 5 Years

ICICI Direct has given buy rating to the stock of Granules India Ltd for a strong gain of 23% with a target price of Rs 375 apiece. The market capitalization is Rs 7708 crore. Granules' share price has grown by approximately 2.8x over the past five years (from approximately Rs 109 in August 2017 to approximately Rs 304 levels in August 2022).

1. Granules India Ltd Stock Outlook

The current market price of the stock is Rs 310 apiece with a 52-week high of Rs 377 apiece and 52-week low at Rs 227 apiece. The stock gained 1.35% in trading yesterday (August 12, 2022).

Multibagger returns: It has given multibagger returns over the years. In last 5 years, the stock has given a return of 184% and in last 3 years the stock has given a return of 222%. The stock has fallen 17% in last 1 year.
According to ICICI Direct, if you buy the stock now at its current market price, it has the potential to reach its target price of Rs 375 apiece in a period of 12 months.

2. Granules India Ltd Q1FY23 Results

Granules' revenue growth in this quarter was mainly driven by volume growth in most markets and also on account of new launches in the US. Sales were up 20% YoY to Rs 1019.6 crore. EBITDA was at Rs 211.5 crore, up 5% YoY with margins at 20.7%. Adjusted PAT was at Rs 127.6 crore (up 6.1% YoY).

3. Granules India Ltd Valuation

According to ICICI Direct, "We maintain BUY rating as Granules 1) focus on backward integration, 2) initiatives like passing on price hike to customers, 3) compelling risk-reward matrix based on FY24E earnings."

4. About Granules India Ltd

Granules is a large-scale vertically integrated company that manufactures API or active pharmaceutical ingredients, intermediates and finished dosages and has seven manufacturing facilities along with B2B & B2C marketing & distribution. Top five products (Paracetamol, Ibuprofen, Metformin, Methocarbamol, Guaifenesin) contributed 81% to FY22 revenues.

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.