Granules India`s Q3 profit falls on weak drug pricing in Europe
Granules India reported a drop in third-quarter profit on Friday, hurt by pricing pressure in its key European market.
Consolidated profit fell to 1.18 billion rupees ($13.7 million) for the quarter ended Dec.31, from 1.26 billion rupees a year earlier.
Granules, which generates about two-thirds of its revenue from North America and 10% from Europe, posted a 1.5% fall in its revenue from operations.
Revenue from North America rose 16% year-on-year, while that from Europe declined 55%.
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KEY CONTEXT
Granules, which holds a 30% share of the global paracetamol market, supplies the drug as an active pharmaceutical ingredient (API) and as a finished dosage form - ready for consumption - in Europe, Canada, and South Africa. APIs are the active and key components in a drug that produce the intended therapeutic effects.
Indian API makers have been grappling with weak pricing in key European and North American markets due to tough competition, even as global drugmakers turn to India to limit their reliance on Chinese contractors.
PEER COMPARISON
Estimates (next Analysts' sentiment
12 months)
RIC PE EV/EBIT Revenue Profit Mean # of Stock to Div
DA growth growth rating* analysts price yield
(%) (%) target** (%)
Granules India 23.85 13.60 11.75 27.90 Strong 4 0.89 0.25
Buy
Alivus Life 24.51 16.21 13.87 16.73 Strong 5 1.04 1.96
Sciences Buy
Laurus Labs 60.36 24.90 15.45 88.32 Hold 11 1.27 0.14
Divi's 61.78 43.44 16.77 28.45 Hold 21 1.10 0.52
Laboratories
* Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER TO DECEMBER STOCK PERFORMANCE
-- All data from LSEG
-- $1 = 86.1660 Indian rupees
