|
Quantamental
Equity Research on GRANULES INDIA LTD | Release: 01 Dec 2018 17:32:50
UTC+05:30 | Reporting Currency: INR | Trading Currency: INR |
Exchange:NSE/BSE NSE CODE:GRANULES and BSE CODE:532482 |
| Last Close: |
INR 88.65 |
| Fair Value: |
INR 187.45 |
| Est. Price by Mar 19: |
INR 138.55 |
| Market Capitalization (INR
Crs): |
2253.90 |
| Industry: |
Pharmaceuticals |
| Rating: |
STRONG BUY |
| Upside: |
111% |
| Company Profile |
|
|
| Granules India is a vertically integrated pharmaceutical
company, manufacturing Active Pharmaceutical Ingredients (APIs),
Pharmaceutical Formulation Intermediaries (PFIs) and Finished Dosages (FDs). |
| Growth Per Share |
|
|
| Particulars |
1-Year |
3-Year |
5-Year |
|
| Revenue % |
19% |
121% |
290% |
|
| EBIT % |
-13% |
43% |
258% |
|
| Earnings % |
-19% |
46% |
307% |
|
| Book Value
% |
44% |
202% |
375% |
|
| Stock Total
Return % |
-24% |
19% |
918% |
|
|
| Share holding
pattern |
| Particulars |
%age |
|
| (A) Promoter
& Promoter Group |
44.88 |
|
| (B) FII/FPI |
9.51 |
|
| (C)
DII/Insurance Companies |
6.45 |
|
| (D) Public holding < 2 lakhs of cap. |
24.14 |
|
| (E) Others |
15.02 |
|
| Grand Total |
100.00 |
|
|
| Fundamentals
(Historical and Estimated) |
| Particulars |
Mar-10 |
Mar-11 |
Mar-12 |
Mar-13 |
Mar-14 |
Mar-15 |
Mar-16 |
Mar-17 |
Mar-18 |
Mar-19 E |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
|
| Price |
10 |
9 |
9 |
11 |
29 |
91 |
125 |
143 |
108 |
139 |
141 |
162 |
185 |
198 |
|
| Return on
Equity |
15% |
10% |
12% |
12% |
21% |
21% |
19% |
18% |
10% |
15% |
14% |
14% |
14% |
13% |
|
| Price to
Earning |
6.8 |
9.0 |
6.1 |
6.6 |
7.8 |
20.4 |
22.1 |
19.9 |
20.7 |
15.5 |
15.5 |
15.5 |
15.5 |
15.5 |
|
| EVTI |
0.7 |
0.7 |
0.6 |
0.6 |
0.9 |
1.8 |
2.4 |
2.6 |
2.1 |
2.1 |
1.9 |
1.9 |
1.9 |
1.8 |
|
| EVTIFM |
6.8 |
9.0 |
6.1 |
6.6 |
7.8 |
20.4 |
22.1 |
19.9 |
20.7 |
15.5 |
15.5 |
15.5 |
15.5 |
15.5 |
|
| Price to Book
Value |
1.0 |
0.9 |
0.7 |
0.8 |
1.7 |
4.3 |
4.1 |
3.6 |
2.1 |
2.4 |
2.1 |
2.2 |
2.2 |
2.1 |
|
| Debt to
Equity |
0.7 |
0.6 |
0.8 |
1.0 |
1.2 |
1.1 |
1.0 |
0.7 |
0.8 |
0.9 |
0.8 |
0.7 |
0.6 |
0.4 |
|
| Dividend Yield |
1% |
2% |
2% |
2% |
1% |
1% |
1% |
1% |
1% |
1% |
1% |
1% |
1% |
1% |
|
| Cash Flow to
Firm |
42% |
38% |
-18% |
-5% |
-25% |
2% |
-3% |
1% |
-12% |
-5% |
6% |
6% |
6% |
10% |
|
|
| Detailed Estimates |
| Title |
Mar-18 |
Mar-19 E |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
|
| Sales |
1,684.62 |
2,262.24 |
2,488.46 |
2,737.31 |
3,011.04 |
3,161.59 |
|
| EBITDA |
305.25 |
480.64 |
528.71 |
581.58 |
639.73 |
671.72 |
|
| EBIT |
229.05 |
378.31 |
399.40 |
449.59 |
505.01 |
534.20 |
|
| PBT |
195.99 |
345.25 |
351.58 |
403.37 |
460.96 |
492.93 |
|
| NPAT |
132.59 |
227.90 |
232.08 |
266.27 |
304.28 |
325.38 |
|
| Price to
Earning |
20.70 |
15.45 |
15.45 |
15.45 |
15.45 |
15.45 |
|
| Price to Book
Value |
2.10 |
2.36 |
2.13 |
2.16 |
2.17 |
2.07 |
|
| Debt to
Equity |
0.75 |
0.95 |
0.81 |
0.68 |
0.56 |
0.36 |
|
| Return on
Equity |
0.10 |
0.15 |
0.14 |
0.14 |
0.14 |
0.13 |
|
| Enterprise Value to Total Income (EVTI) |
2.08 |
2.07 |
1.89 |
1.89 |
1.88 |
1.79 |
|
| Enterprise Value to Total Income to Firm Margin(EVTIFM) |
27.82 |
23.26 |
22.11 |
21.54 |
21.02 |
19.85 |
|
| Price or Est.
Share Prices |
108.13 |
138.55 |
141.10 |
161.90 |
185.05 |
197.90 |
|
|
| DISCOUNTED CASH
FLOW |
| Title |
Mar-19 E |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
|
| PBT |
345.25 |
351.58 |
403.37 |
460.96 |
492.93 |
|
| Interest |
33.06 |
47.82 |
46.22 |
44.05 |
41.27 |
|
| Depreciation |
102.33 |
129.30 |
131.99 |
134.73 |
137.52 |
|
| Cash Flow
Before Tax |
480.64 |
528.71 |
581.58 |
639.73 |
671.72 |
|
| Tax Rate |
33.99 |
33.99 |
33.99 |
33.99 |
33.99 |
|
| Cash Flow
After Tax |
317.27 |
349.00 |
383.90 |
422.29 |
443.40 |
|
| Terminal Cash
Flow |
- |
7,931.13 |
|
| Total Cash
Flow |
317.27 |
349.00 |
383.90 |
422.29 |
8,374.53 |
|
| Present Value of
Cash Flow |
5,652.66 |
|
| Debt |
888.01 |
|
| Value of Equity |
4,764.65 |
|
| Fair Value Per
Share |
187.45 |
|
|
| Equity |
|
|
|
|
2,254 |
|
| Debt |
|
|
|
|
978 |
|
|
| Beta |
Take from Reuters |
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Risk Free Rate |
Prevailing Yield in India |
|
|
8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Market Risk Premium |
Assuming 8.82% premium
for Equity Investments |
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest Paid |
|
|
|
|
33 |
|
| Tax Benefit |
|
|
|
|
11 |
|
| Interest Net of Tax |
|
|
|
|
22 |
|
| Debt |
|
|
|
|
978 |
|
| Cost of Debt |
|
|
|
|
2% |
|
| Cost of Equity |
|
|
|
|
17% |
|
| Debt Weight |
|
|
|
|
30% |
|
| Equity Weight |
|
|
|
|
70% |
|
| WACC |
|
|
|
|
13% |
|
|
| Cash Flow of Mar-23 E |
|
|
|
|
443.40 |
|
| Growth |
|
|
|
|
6.4% |
|
| Present Value of Terminal
Cashflow |
|
|
|
|
7,931.13 |
|
|
| Peer Comparision |
| # |
Name |
CMP
Rs. |
Mar
Cap Rs.Cr. |
B.V.
Rs. |
Annualized
ROE % |
ROCE
% |
Latest
EVTI |
Latest
EVTIFM |
CMP
/ BV |
P/E |
Debt
/ Eq |
Div
Yld % |
Growth
Rate R % |
SGR
% |
Ann
Total Income |
PQEIOI |
QoQ
Sales % |
Qtr
Sales Var % |
QoQ
Profits % |
Qtr
Profit Var % |
Graham's
Number Rs. |
| 1 |
Lupin |
886.75 |
40,105 |
298.72 |
10.24 |
10.21 |
2.72 |
130.77 |
2.97 |
32.34 |
0.53 |
0.56 |
1.03 |
0.79 |
16,728 |
47.00 |
1,072 |
2.47 |
-0.02 |
32.23 |
-41.24 |
| 2 |
Divi's Lab. |
1,439.35 |
38,210 |
237.46 |
34.93 |
21.37 |
6.65 |
26.87 |
6.06 |
33.22 |
0.01 |
0.69 |
24.27 |
31.34 |
5,460 |
52.02 |
120 |
29.11 |
44.35 |
49.40 |
92.31 |
| 3 |
Jubilant Life |
774.80 |
12,343 |
288.71 |
26.01 |
15.26 |
1.70 |
15.44 |
2.68 |
15.92 |
0.85 |
0.39 |
24.12 |
21.80 |
9,093 |
50.68 |
60 |
9.18 |
38.23 |
4.69 |
67.19 |
| 4 |
Vinati Organics |
1,450.80 |
7,456 |
174.75 |
42.54 |
27.52 |
6.96 |
32.29 |
8.30 |
35.02 |
0.02 |
0.31 |
35.70 |
44.19 |
1,054 |
74.01 |
137 |
-4.51 |
57.34 |
1.21 |
123.09 |
| 5 |
Granules India |
88.65 |
2,254 |
55.66 |
23.91 |
11.92 |
1.24 |
14.81 |
1.59 |
13.86 |
0.75 |
1.13 |
19.33 |
15.78 |
2,392 |
17.80 |
52 |
28.16 |
47.97 |
16.33 |
49.38 |
| 6 |
Suven Life Scie. |
241.30 |
3,071 |
72.55 |
9.84 |
25.09 |
7.03 |
53.14 |
3.33 |
19.95 |
0.03 |
0.62 |
8.65 |
31.66 |
384 |
60.00 |
269 |
-53.29 |
-16.23 |
-53.63 |
-43.28 |
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