Goodwill Investors’ Education: 3rd June 2020
Eagle’s Eyes: Stock Market Today- A review:
Corona triggers Pharma Stocks:
Nifty Pharma Index today touched almost 10,000 mark.
Thanks to Corona most of the Pharma stocks have picked up substantially as they are all putting their best foot forward in R & D to develop vaccines for the deadly disease-COVID ’19. Almost all stocks in Pharma scale new heights. One such is Granules India Ltd which touched the 52 week high today..@ Rs 188 – 3 % up against.52 week low of Rs 145.
Granules India Q4 results declared on 2nd June,prompted the bourses to respond positively as the PAT is up by over 44 % to 92.3 cr although the there is a decline in sales by 2 %.-@Rs.600 cr. in Q4.Revenue was down due to restriction on Paracetamol. Consolidated Profit was up by 62 % to Rs 136 Cr vs Rs36 Cr on Q-o-Q basis.
Gross Profit grew 2.5% to Rs 100 crore in Q4 FY20 over Q4FY19. The EBITDA during the quarter was impacted due to onetime expense of Rs 22 crore due to impairment of investment at Granules Pharmaceuticals (GPI). Excluding one-time expenses, EBITDA jumped 25% to Rs 121 crore and EBITDA margin expanded by 43. 7 bps (basis points) to stand at 20% for the quarter. With regards to COVID-19 pandemic, Granules India has assured that it is taking all the necessary steps to ensure businesses and safety, focusing on people, business continuity and providing solutions to support global response. The company, in its press release, further added that: “Our business is performing well and has demonstrated resilience in the face of significant demand. We have implemented business continuity plans across all our essential operations. The liquidity position of GIL remains strong and we have sufficient cash for o… our current operational needs and access to significant additional undrawn committed sources of finance, if required. With respect to our supply chain, we are closely monitoring all parts of our manufacturing network and have been able to respond quickly to any fluctuations in demand..The buyback of shares to the extent of 250 crore (4.9% of paid up capital) and is expected to be completed by the end of June 2020.
Commenting on the Q4 results, Krishna Prasad Chigurupati, the CMD of Granules India, has said that: “I am happy to share with you that our growth momentum for FY20 and Q4FY20 has been very robust despite the COVID-19 led challenges and we continue to experience strong d… demand across our products. FY20 reported a 14% growth in revenue, an impressive EBITDA margin expansion of 337 bps and a year-on-year PAT growth of 42%. This is the result of the launch of new profitable products through GPI, increased FD sales, operational excellence and a vigilant watch over our margins via optimal product mix, capacity utilization and minimization of our expenses. Our regulated markets (North America and Europe) contributed 73% of revenues in FY20. During the year we made 14 filings; US ANDAs- 11, EP-2 and UK-1. We have received approvals for 12 ANDAs and launched 5 pr… products in the US. We are happy to have achieved our stated guidance in FY20 and going forward, we expect to maintain our focus on delivering superior shareholder value.”
Granules India is a growing pharmaceutical manufacturing company. The company produces finished dosages (FDs), pharmaceutical formulation intermediates (PFIs) and active pharmaceutical ingredients (APIs).
Granules India is a stock worth watching for potential surge in medium term.