IIFL Securities's Stock Idea: Buy Granules India with Target Rs 475

IIFL Securities recommends a buy rating for Granules India, with a target price of Rs 475. The company's strong performance in the US market, combined with its robust product pipeline and expanding capacity, are seen as key growth drivers. Despite facing headwinds in the domestic market, Granules India is expected to report a healthy 13-15% revenue growth over the next two to three years, supported by its international business. At the current market price of Rs 461.6, IIFL Securities believes the stock offers a favorable entry point for investors seeking exposure to the pharmaceutical sector.

About Granules India:

Granules India Limited, listed on the National Stock Exchange (NSE), is a global pharmaceutical company headquartered in Hyderabad, India. The company manufactures and markets a range of pharmaceutical formulations, active pharmaceutical ingredients (APIs), and bio-pharmaceuticals. Granules India has a presence in over 70 countries worldwide, with manufacturing facilities spread across India, the United States, and China. The company's product portfolio includes antibiotics, cardiovascular drugs, anti-diabetics, and antiviral medications. Granules India is committed to providing high-quality and affordable healthcare solutions to patients around the globe.

52 Week Price Trend:

Granules India's current market price (CMP) of Rs 461.6 hovers below its 52-week high of Rs 480.5, indicating a potential upside of 3.9%. However, the stock has witnessed a significant rise from its 52-week low of Rs 267.75, reflecting a strong recovery of 72%. This growth underscores Granules India's resilience and suggests that the company may continue to perform well in the future.

Stratzy's MOST Analysis:

Based on Stratzy's MOST framework, GRANULES has received an AA- rating, indicating medium fundamental risks. The MOST framework evaluates companies based on Management, Outlook, Safety, and Trend (MOST). GRANULES' strong management, positive outlook, and stable safety have contributed to its AA- rating. This suggests that GRANULES' fundamentals are sound and it has the potential for future growth.

Company's Fundamentals:

Granules India (NSE: GRANULES), a leading pharmaceutical company, currently trades at a Stock PE of 28.82, indicating that investors are willing to pay 28.82 times the company's earnings per share for a single share. Its PB Ratio of 3.84 suggests that the market value of the company's tangible assets, such as equipment and inventory, is 3.84 times its book value. Meanwhile, the Dividend Yield of 0.32% represents the annual dividend paid per share as a percentage of the current stock price, indicating the potential income return for investors.

Fundamental and Technical information provided in this blog were last updated on 06 Jun, 2024

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