Buy Granules India; target of Rs 460: Motilal Oswal

Motilal Oswal is bullish on Granules India has recommended buy rating on the stock with a target price of Rs 460 in its research report dated January 28, 2021.

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Motilal Oswal’s research report on Granules India

GRAN delivered an in line performance in 3QFY21. It sustained its strong earnings momentum led by Intermediates (PFI) and API segments. The delay in ANDA launches impacted the YoY growth rate for the Formulations segment. The company remains on track for capacity expansion at its Visakhapatnam and US sites to cater to growth in FY23-24. n We have tweaked our FY21E/FY22E/FY23E EPS estimate to factor in: a) delay in ANDA launches, b) higher raw material prices, and c) withdrawal of export incentive benefits. We continue to value GRAN at 16x 12 months forward earnings to arrive at our TP of INR460/share. We remain positive on the back of niche product pipeline and healthy base business. Reiterate Buy.

Outlook

We continue to value GRAN at 16x 12 months forward earnings to arrive at our TP of INR460/share. Maintain Buy.

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