Granules India Ltd., a pharmaceutical manufacturing company, has reported a significant increase in its second-quarter revenue for the fiscal year 2024. The company's revenue surged approximately 3% year-over-year and 20% quarter-over-quarter to Rs. 1,189 crore. This growth was primarily driven by a robust 27% year-over-year increase in formulations revenue, which accounts for about 62% of the total sales.
The Hyderabad-based company also saw an impressive 11% year-over-year growth in its North American market, with revenues reaching Rs. 799 crore. The positive financial outcome comes amid expectations of delayed product launches that are anticipated to boost future revenue and profitability for Granules India.
In addition to its current financial achievements, Granules India is embarking on an ambitious capital expenditure plan. The company intends to invest Rs. 2,000 crore over the next five years to establish a green chemistry plant in Kakinada, Andhra Pradesh. This initiative is part of Granules India's strategic move towards achieving carbon neutrality in Active Pharmaceutical Ingredient (API) manufacturing and becoming a fully integrated player in the industry. The investment is expected to yield medium to long-term operating leverage benefits.
Sharekhan, a brokerage firm, has acknowledged the company's strong performance and potential for growth. In light of the recent financial results and strategic investments, Sharekhan maintains a 'Buy' rating on Granules India's stock. The firm has also revised its price target upwards to Rs. 417, citing attractive valuations of approximately 14.7 times and 12.4 times the estimated earnings for fiscal years 2024 and 2025, respectively.
InvestingPro Insights
In line with the detailed financial report of Granules India Ltd, InvestingPro provides some insightful tips and real-time data.
InvestingPro tips suggest that Granules management has been assertively buying back shares, indicating strong confidence in the company's future. The company also yields a high return on invested capital, which is a positive sign for potential investors. Moreover, the strong earnings of Granules should allow management to continue dividend payments, maintaining a streak of 21 consecutive years.
InvestingPro data also points out that the company is a prominent player in the pharmaceutical industry, which aligns with Granules India's recent strategic move towards carbon neutrality in API manufacturing. Despite a recent slowdown, revenue growth has been consistent, and the stock is currently trading near its 52-week high.
In summary, Granules India is showing a strong return over the last three months, and analysts predict the company will be profitable this year. For more detailed insights and a treasure trove of additional tips, consider exploring the InvestingPro platform.
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