Granules India Q4 Review: Motilal Oswal Maintains 'Buy' Post Inline Results, But Cuts Target Price

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Motilal Oswal Report

We cut our earnings estimates of Granules India Ltd,. by 8%/6% for FY26/FY27 factoring in-

1. an extended production disruption at the Gagillapur site to implement remediation measures,

2. additional operational costs related to Senn Chemicals, and

3. a weak pricing in Paracetamol active pharma ingredient.

We value Granules India at 18x 12M forward earnings to arrive at our target price of Rs 600.

Granules India is focusing on building a differentiated product pipeline in the oncology and ADHD domains. With the Senn Chemicals acquisition, it is adding peptide CDMO as a growth driver for the future. It is also adding capacities in the FDF segment to cater to future manufacturing requirements.

Overall, we expect a 14%/20%/26% revenue/Ebitda/PAT CAGR during FY25-27. Reiterate Buy.

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