Granules India Ltd

Stock Opportunities Untested - but worth a good look
1419

They reduced the position from 5.23% to 2.73%

4 Likes
1421

Granules Q2 FY25:
https://nsearchives.nseindia.com/corporate/GRANULES_06112024132254_NSEBSEINVESTORPRESENTATION.pdf

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Disclosure: Invested

2 Likes
1422

Management informed:

"This is regarding our communication dated September 07, 2024, about the US FDA
inspection of the Company’s facility at Gagillapur, Hyderabad, Telangana and the issuance of
Form 483 with 6 observations.

US FDA has classified the inspection as “Official Action Indicated” (OAI)."

Any inputs, from fellow VP members, on what could be the impact of this OAI on revenue / profitability.

Disc: Not Yet invested, but Tracking from quite some time.

1423

Official Action Indicated (OAI) is a classification given by the US Food and Drug Administration (FDA) to a facility that is not in compliance with current good manufacturing practices (CGMP). The FDA notifies the company of the classification within 90 days of the inspection.

An OAI classification can mean:

  • A facility has been cited for egregious violations related to food safety
  • A facility has an uncorrected Voluntary Action Indicated (VAI) condition from a previous inspection
  • A facility has a condition that poses an imminent health hazard
  • The FDA may withhold approval of pending applications or supplements from the facility

An OAI classification does not immediately impact existing production or revenue, but it can lead to:

  • Blocked new product approvals
  • Further regulatory actions, such as warning letters or import bans
  • Increased remediation costs
6 Likes
1424

Finally Granules in moving into peptide CDMO by buying 100% of Senn Chemical AG for 192.22 cr

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4 Likes
1425

Q4 FY25: * Flat results from the company.

  • Revenue: ₹1,197.4 crores (+2% YoY).

  • Gross Margin: 63.4% (vs 60.1% YoY).

  • EBITDA: ₹252.4 crores (21.1% margin).

  • Net Debt: ₹706 crores (improved from ₹842 crores at start of year).

  • Cash-to-Cash Cycle: 202 days (vs 213 in Q3).
    FY25 Full Year:

  • Revenue: ₹4,481.6 crores (flat YoY).

  • Gross Margin: 61.5% (↑635 bps).

  • EBITDA: ₹945.2 crores (+10% YoY).

  • R&D: ₹238 crores.

  • ROC: 16.6%.

  • There is a major impact because of the FDA inspection at Gagillapur facility
    Gagillapur FDA Inspection:

  • August 2024: Inspected; six Form 483s issued.

  • February 2025: Warning letter received.

  • Manufacturing continues but with slowed operations due to remediation.

  • Over 1,200 batches and 2,600 swabs tested—no contamination found.

  • Remediation guided by three global consultants; expected to continue for 1–2 more quarters.

  • Remediation Cost: ₹60 crores in FY25; will continue at a lower level in H1 FY26.

  • For a Company of 12K crore Market capital, it is investing ₹1000 crores in Capex of which 300+ is already spent and remaining to follow.

  • The company wants to pivot from API, PFI manufacturing to FD, to move up in the value chain.

  • Looks like it is in transition towards with Peptides and oncology products.

1 Like