Add Granules India Ltd for Target Rs. 835 by Choice Institutional Equities
Key Conference Call Highlights
Capacity Expansion & Product Launches
* GPI (Virginia facility) moved from 74th to 27th position among all US generic companies by sales value since FY21 and now holds 4th position in the controlled substance space.
* The Gagillapur facility's remediation is materially complete — cleaning validation done across all blocks, all FDA action point responses submitted by February — but the facility is now in a waitand-watch mode for the USFDA re-inspection, with no timeline communicated by the FDA yet.
* Granules is preparing for potential US product launches as approvals progress, including nine applications awaiting clearance from the Gagillapur site.
* The company plans to add one to two new controlled substance products annually in the next two to three years.
Peptide & CDMO Growth
* The Peptide CDMO business emerged as a meaningful fourth revenue pillar, generating INR 1,593 Mn in FY26 and achieving its first positive EBITDA quarter in Q4 — an important milestone.
* The management expects the Peptides CDMO business to achieve PAT positivity on a full-year basis from FY27.
* Cosmetics is a growing pillar, with strong traction in recent quarters.
* Customer base is spread across double-digit customers with no over-concentration and CapEx is being deployed in a demandlinked manner rather than speculatively.
* A peptide Centre of Excellence at IIT Hyderabad is now fully active, collaborating with the Zurich R&D team on live customer projects.
* The next step in India is a brownfield manufacturing facility for peptide intermediates, followed by a peptide API facility at an appropriate stage.
Outlook
* The management enters FY27 with greater confidence, targeting scale-up in peptide CDMO, accelerating the complex generics pipeline and resolution of regulatory overhangs.
* CapEx for FY27 is projected to be around INR 6,000 Mn, allocated broadly across a new API facility, IT investments and a distribution centre in the USA.
* The management expressed uncertainty regarding future gross margin due to rising raw material, packing material and freight costs but remains confident in eventually securing price increases to compensate.
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SEBI Registration no.: INZ 000160131
