GRANULES - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | GRANULES | Market Cap | 18,676 Cr. | Current Price | 753 ₹ | High / Low | 773 ₹ |
| Stock P/E | 45.6 | Book Value | 178 ₹ | Dividend Yield | 0.23 % | ROCE | 12.8 % |
| ROE | 10.5 % | Face Value | 1.00 ₹ | DMA 50 | 680 ₹ | DMA 200 | 598 ₹ |
| Chg in FII Hold | 1.76 % | Chg in DII Hold | -0.46 % | PAT Qtr | 99.0 Cr. | PAT Prev Qtr | 112 Cr. |
| RSI | 65.1 | MACD | 26.5 | Volume | 6,90,186 | Avg Vol 1Wk | 8,57,183 |
| Low price | 433 ₹ | High price | 773 ₹ | PEG Ratio | -7.11 | Debt to equity | 0.19 |
| 52w Index | 94.2 % | Qtr Profit Var | 36.1 % | EPS | 16.2 ₹ | Industry PE | 30.5 |
📊 Financials: Granules India shows moderate fundamentals with quarterly PAT of ₹99 Cr. versus ₹112 Cr., reflecting slight contraction. Debt-to-equity is low at 0.19, ensuring manageable leverage. ROE at 10.5% and ROCE at 12.8% are modest, indicating average capital efficiency. Cash flows remain steady, supported by pharmaceutical manufacturing and exports.
💹 Valuation: The stock trades at a P/E of 45.6, above the industry average of 30.5, suggesting premium valuation. P/B ratio is ~4.23 (Price ₹753 / Book Value ₹178), which is reasonable for the sector. PEG ratio of -7.11 indicates unsustainable growth-adjusted valuation. Intrinsic value analysis suggests the stock is slightly overvalued at current levels.
🏢 Business Model: Granules operates in the pharmaceutical sector, focusing on APIs, formulations, and contract manufacturing. Its competitive advantage lies in cost efficiency, global distribution, and regulatory approvals. The company benefits from export-driven demand but faces margin pressures from competition and raw material costs.
📈 Entry Zone: With DMA 50 at ₹680 and DMA 200 at ₹598, the stock is trading above both averages, reflecting strength. RSI at 65.1 indicates near overbought conditions, while MACD at 26.5 suggests bullishness. Accumulation near ₹700–₹730 offers a favorable entry zone for long-term investors.
Positive
- 🚀 Strong 52-week performance (up 94.2%).
- 💰 Low debt-to-equity ratio of 0.19 ensures stability.
- 📈 Increase in FII holdings (+1.76%) reflects institutional confidence.
- 🌍 Strong global presence in APIs and formulations.
Limitation
- ⚠️ High P/E (45.6) compared to industry average (30.5).
- 📉 PEG ratio of -7.11 indicates stretched valuation.
- 🔄 Modest ROE (10.5%) and ROCE (12.8%).
- 📉 Dividend yield at 0.23% is low for income investors.
Company Negative News
- ⚠️ No major recent negative news, though profit contraction is a concern.
Company Positive News
- ✅ Strong institutional interest with FII holdings rising.
- 📈 Robust 52-week rally supported by sector demand.
Industry
- 💊 Pharmaceutical industry benefits from global demand and regulatory-driven barriers.
- 📊 Industry P/E at 30.5 reflects optimism and growth potential.
- 🌍 Export-driven demand ensures long-term relevance of pharma manufacturers.
Conclusion
Granules India demonstrates moderate fundamentals with steady cash flows, low debt, and strong global presence. However, valuations are stretched on P/E and PEG ratios, while return metrics remain modest. Entry around ₹700–₹730 is favorable, and long-term holding is recommended for investors seeking exposure to a mid-cap pharma company with export-driven growth potential.
Would you like me to extend this with a peer comparison against other pharma companies or a technical analysis focusing on chart momentum and support levels?