⚡ At a Glance
Granules India was once the smallcap pharma darling with APIs in its veins and PFIs in its bloodstream. But lately, its financials are more like a delayed-release capsule — slow, steady, and leaving investors wondering if they misread the dosage instructions. Let’s unpack this stock’s 5-year chart, earnings, and formulation strategy like it’s a prescription from Dr. Margin Shrinker.
📦 1. What Exactly Do They Do?
Granules India is a vertically integrated pharma company involved in:
- API (Active Pharmaceutical Ingredients)
- PFI (Pharmaceutical Formulation Intermediates)
- FDF (Finished Dosage Forms)
Think of them as a pharma kitchen that not only grows the ingredients (APIs), but also makes the half-cooked dough (PFIs), and finishes with the ready-to-serve tablet (FDF).
They’re especially known for paracetamol, ibuprofen, and metformin. Aka – the things every Indian pops after wedding food or office stress.
📉 2. 5-Year Financial Snapshot
| ₹ in Cr | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue | 3,238 | 3,765 | 4,512 | 4,506 | 4,482 |
| EBITDA | 856 | 727 | 915 | 858 | 945 |
| EBITDA % | 26% | 19% | 20% | 19% | 21% |
| PAT | 549 | 413 | 517 | 405 | 502 |
| EPS (₹) | 22.18 | 16.64 | 21.34 | 16.72 | 20.68 |
🧾 Verdict:
- Revenues flatlined post-FY23.
- PAT has been… confused.
- Margins are slowly healing post FY22 crash.
🧪 3. Formulations, FDA Fumbles & CAPEX Dreams
- The Gagillapur plant got an FDA warning letter. That hit sentiment harder than a rejected 10th-class science project.
- They announced a ₹600 Cr CAPEX in FY25 for CDMO and peptide expansion.
- In May 2025, they acquired a peptide CDMO biz — a pivot towards high-margin complex molecules. Think of it as moving from mass-market crocin to boutique biopharma.
💡 Translation: They’re trying to escape the “bulk drug supplier” zone and enter premium pharma territory.
📊 4. Quarterly Trend (Mar 2022 – Mar 2025)
| Quarter | Sales (₹ Cr) | EBITDA % | PAT (₹ Cr) |
|---|---|---|---|
| Mar ’22 | 1,030 | 19% | 111 |
| Jun ’22 | 1,020 | 21% | 128 |
| Sep ’22 | 1,151 | 21% | 145 |
| Mar ’23 | 1,196 | 19% | 120 |
| Mar ’24 | 1,176 | 22% | 130 |
| Mar ’25 | 1,197 | 21% | 152 |
📉 Flat revenue, but profit slowly returning to FY22 levels.
💼 5. Balance Sheet & Cash Flow
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Debt | ₹1,136 Cr | ₹1,315 Cr | ₹1,455 Cr |
| Cash from Ops | ₹739 Cr | ₹439 Cr | ₹867 Cr |
| CAPEX | ₹192 Cr | ₹358 Cr | ₹691 Cr |
- Debt up 28% in 2 years.
- Huge CAPEX in FY25 for expansion. They’re clearly cooking something in the pharma lab.
🧮 6. Valuation & Fair Value Zone
| Metric | Value |
|---|---|
| CMP | ₹480 |
| TTM EPS | ₹20.68 |
| P/E | 24.3x |
| Industry Median P/E | 32x |
| Book Value | ₹153 |
| Price to Book | ~3.1x |
🧾 Fair Value Calculation
Let’s assume:
- Normalized EPS: ₹21–23
- Fair P/E range: 20x–26x
- 💰 Fair Value Range = ₹420 – ₹600
It’s not exactly a screaming buy, but not overpriced either. If their CDMO dreams convert into earnings, the upper band is achievable.
🧬 7. Promoter Holding – Mild Side Effect?
| Quarter | Promoter Holding |
|---|---|
| Mar ’22 | 42.02% |
| Mar ’23 | 42.02% |
| Mar ’24 | 38.87% |
| Mar ’25 | 38.83% |
That’s a -3.2% drop in 3 years, while DIIs have gone from 5% → 22.4%.
⚠️ Smart money shifting? Or just detoxing portfolios?
⚔️ 8. Peer Pressure — How It Stacks Up
| Company | P/E | ROCE | Net Profit FY25 |
|---|---|---|---|
| Dr Reddy’s | 19.6x | 23.1% | ₹1,586 Cr |
| Cipla | 22.7x | 23.3% | ₹1,214 Cr |
| Granules | 24.3x | 15.1% | ₹502 Cr |
| Torrent Pharma | 55.5x | 27.2% | ₹498 Cr |
| Zydus | 20.5x | 24.4% | ₹1,243 Cr |
🤷♂️ Mid-tier profits, average margins, but pricing in improvement.
🧠 TL;DR
- Business Model: API → PFI → FDF + now CDMO.
- 5-Year Growth: Sluggish sales, but margins bouncing back.
- CAPEX-heavy year: ₹600+ Cr infused to future-proof.
- FDA warning: Temporary bitter pill.
- Valuation: Reasonable, not a steal.
- Promoter stake falling, DII holding rising.
🔮 Final Dose
Granules isn’t a one-pill-cures-all story. It’s more like a long course antibiotic — slow acting, sometimes annoying, but possibly effective in the long run.
Its shift into CDMO and complex molecules is smart — if execution follows. Till then, the stock may remain in the ₹400–₹500 pharmacy aisle unless prescriptions (earnings) go large.
🎯 Fair Value Range: ₹420 – ₹600
(Assuming 20–26x earnings on ₹21–23 EPS base)
✍️ Written by Prashant | 📅 June 20, 2025
Tags: Granules India, API Stocks, Pharma Sector, CDMO, Smallcap Pharma, EduInvesting, India Pharma Stocks
