GRANULES - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.6

📊 Core Financials Breakdown

Profitability

ROE: 9.14% and ROCE: 10.9% — moderate returns, below top-tier pharma benchmarks.

EPS: ₹12.2 — decent earnings base, though quarterly PAT dipped 16.2%, indicating margin pressure.

Debt-to-Equity: 0.26 — manageable leverage, typical for manufacturing-heavy pharma operations.

Dividend & Book Value

Dividend Yield: 0.28% — minimal, not a key attraction for income investors.

Book Value: ₹140 — implies a P/B ratio of ~3.9, slightly elevated given the ROE.

💰 Valuation Metrics

Metric Value Comment

P/E Ratio 46.6 Above industry average (33.4) — suggests premium pricing

PEG Ratio -5.42 Negative PEG flags unreliable or declining growth

Intrinsic Value ~₹490–₹510 CMP slightly above fair value zone

Valuation is stretched, especially with a negative PEG and declining profit trend.

💊 Business Model & Competitive Edge

Sector: Pharmaceuticals — focused on APIs, intermediates, and finished dosages.

Strengths

Vertically integrated model with global regulatory approvals (USFDA, EU, WHO).

Strong presence in paracetamol, ibuprofen, and metformin segments.

Recent USFDA inspections cleared with zero critical observations

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DII holding up (+1.07%) — positive domestic sentiment.

Challenges

FII holding down (-1.90%) — cautious foreign stance.

CEO resignation and regulatory scrutiny may impact investor confidence

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Profit contraction and high valuation multiples limit upside.

📉 Technicals & Entry Zone

Current Price: ₹543

DMA 50: ₹497 | DMA 200: ₹504 — bullish trend intact

RSI: 72.5 — overbought zone

MACD: Positive — momentum strong

📌 Suggested Entry Zone: ₹490–₹510

A pullback near the 200 DMA would offer a better margin of safety for accumulation.

🧭 Long-Term Holding Guidance

Hold with caution: If already invested, monitor earnings stability and regulatory developments.

Avoid fresh entry at CMP: Wait for valuation to cool or for earnings to justify the premium.

Analysts have a consensus target of ₹608, implying ~12% upside

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. You can explore Granules India’s analyst reports and price targets or review its financial overview and peer comparison for deeper insights. Let me know if you'd like a comparison with Alembic Pharma or Laurus Labs.

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stockanalysis.com

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trendlyne.com

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