Granules India Q3 Results Review - Paracetamol Led Earnings Growth For The Quarter: Motilal Oswal

Motilal Oswal Report

Granules India ltd. delivered operationally in-line Q3 FY23, led by robust traction in paracetamol (sales up 37% YoY). Favorable demand-supply consistency exhibited by Granules India would enable a sustained off-take of paracetamol by its customers in the coming quarters.

We cut our earnings per share estimates by 3%/5%/3% for FY23/FY24/FY25, respectively, to factor in:

1. an ongoing price erosion in the non-core molecules,

2. gradual traction in new launches, and

3. increased operational cost.

Granules India is working on multiple fronts –

1. differentiated product development coupled with supportive manufacturing capability/capacity,

2. backward integration for key raw materials,

3. strategic partnership with Greenko for carbon-free energy, green hydrogen and other chemical derivatives.

Accordingly, we factor in 19% earnings compound annual growth rate over FY23-25E.

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