Granules India Ltd

(us121) #572

All seems good on financial front though muted growth over previous quarter.
important point at this juncture is getting inspection approvals and not losing the revenue on that account on Q4.

(PK) #573

(Sunday) #574

Some of these targets by brokerages are not realistic in the near future… May be 24 months from now… because there being continuous Capital expenditure and product placement expenditure. Revenues from these expenditures would start coming at least an year from now.

These are my understandings. If someone has a different view, kindly share it.


There targets assume PE re-rating etc which is not going to happen in the near term. IMO, some of things market would not like are:-

  • Aggressive capex will potentially keep FCF negative till 2020
  • Capitalization of investments in US: They disclosed that their investments in US subsidiary being capitalised which will hit P&L in FY19 when it gets approvals and starts making sales.
  • The take-off will take some more time while they also plan potential equity dilution in the medium term

To its credit, Mr. Prasad mentioned that bottomlin growth will very good in FY18 due to PAT consolidation from JVs. I think it remains a steady growth story till FY19 and take-off after that. May be market will re-rate on seeing execution on complex molecules.

Disc: Invested

(Sunday) #576

Also need to keep watch on what these complex molecules are, how much revenue percentage they can contribute

In USA there is huge pressure on pharma companies to bring down the cost. This should help Granules.

Also in the budget, something has been mentioned on inverted duty structure which should help bring down the cost.

GST should also bring down the tax rate… Don’t remember the tax rate they are currently paying. Whether 25 percent or more.

(rvetri) #577

Hi all… When we all think that Granules will take more than 12 months for
the stock prices to recover, the opposite may happen quickly…Markets never
respond to consensus thoughts…Can always surprise us…Remember the follg.

  • Granules is at the same price level today as it was 2 - 3 yrs back.
  • Has the fundamentals improved in last 2 - 3 yrs‚Ķdefinitely yes. The
    margins are more now than 2 yrs back. And profits are above 60% from those
  • The sales to capex ratio is more than 2. Not very good but not bad also
    for a capital intensive industry. About 50% of this capex is funded by
    internal accruals… very good…The debt equity too is quite OK and below 0.8
  • If America bans all indian companies where will they buy
    from…china?..brazil?..Mexico?..Russia?..Or will they make it in
    USA…no way. As a powerful buyer, they are just ensuring quality from
    Indian Cos. But they have nowhere else to go but buy from Indian cos…

I think re-rating can happen before next 12 months

Disc: invested, have a vested interest

(JKS) #578

Re-inspection is complete as soon as news surfaced, the stock ran up 10%

(Furkan Alam) #579

Just shows how the market over-reacts and gives opportunities to a true long term investor solely focused on a companies fundamentals…

(rvetri) #580

coincidentally, i happened to be right. After my message yesterday, here u
have a 10% gain today…conicidentally lucky…Well said. by @furkanalam…
Just focus on the fundamentals and prices will catch up sooner than later

Vetrivel R

(tankerooooo) #581

As per the earnings conference call, Granules might be only few weeks away from having the Omnichem facility cleared by the FDA. So we have another upcoming positive catalyst

(sanjay agarwal) #582

Could not.find transcripts any link ?

(tankerooooo) #583

There is no link to the transcript yet… I heard the conference call live. You can access the recording at researchbytes.

(mrai74) #584

Brokerage houses are bullish and show that past was glorious as 7 lac invested 7 years back could have turned into 1 Crore now … can we expect the future to be equally glorious

Rs 7 lakh in this stock for 7 years could have made you crorepati

(us121) #585

I am cautiously invested in this scrip.
However, just commenting on this specific news…

Better to remember… Past performance is not the indicator of Future Performance.

Yes, it always helps in marketing the future, but future needs to be monitored with wide open eyes and not extrapolated particularly if our future is also tied up with theirs!

(rvetri) #586

13 times in 7 yrs means - someone had ought this scrip below its FV of Rs
10… Say at Rs 9…perhaps bought at its lowest price… We do not know how
many of them had continued its run till date…It needs extreme patience to
go through the run from Rs 9 till Rs 129 ( Rs 175 a year back ) will all
major economic and poiltical events unfolding if someone had continued this
ride - hatsoff to them…

(Nityanand) #587

@rvetri the stock is available at face value of 1 right now. That means it got splitted. Thr price would have been 90 with that calculation

(mrai74) #588

Dear Parab,
If there was NO split the current price would have been 1290…

(Sunday) #589

On the Granules webpage - link given below:

I had known Granules for API, PF, FD.
But today while going through the Granules webpage - I came across Oncology, High Potent APIs

I do not know how much wallet share they are currently having in Granules portfolio. If someone with the right medical background, can check these API names and provide more inputs on the market potential, it would be great.

Can granules specialize in these specialized API products, same like Shilpa Medicare ?

(Growth_without Debt) #590

I really surprised by reading roller coaster (too much bullish and too much bearish) view on Granules (just read this thread on Granules for last two years!). People who takes view from this forum as it is, i am sure nobody will hold it longer period or might pick at higher valuation and dump in panic at loss!
Forum view is just resonance of news paper and broker view!


Interview from last week

OmniChem will grow at not less than 20 per cent: Krishna Prasad, CMG, Granules India

The title is misleading, it should read ‚Äė‚Äô OmniChem will grow with EBIDTA margins not less than 20 per cent‚Äô‚Äô

Earnings Call :

Investor Presentation: