The Hindu Business Line : Granules India shines on strong export market

GRANULES India is moving up on strong export impetus. The stock today moved up by 4.35 per cent to Rs 116.45. The traded quantity in the counter also shot up to 3.42 lakh shares from the fortnightly average of 2.46 lakh shares on the BSE.

Granules India, engaged in the manufacture of compressible granules as a value-added product to the pharmaceuticals formulation players, is witnessing steady growth in its sales and exports.

It has established itself as a favoured partner with an array of pharmaceuticals companies world over in the API outsourcing market, according to analysts.

With its latest facilities and several approvals, including USFDA for its plant, the company has gained an edge over its competitors in the international arena.

For the quarter ended September 2005, the company reported a 36.05-per cent rise in the net profit and a sales increase by 33 per cent.

According to Pradip Hotchandani of Anagram Stockbroking, its new 8000 tpa paracetamol facility in Bonthapally has enabled it to respond to the challenges in the API space.

"A few global pharmaceutical companies posses the capability to provide granulation solutions in commercial batch sizes at a time when globally granulation outsourcing is increasing for cost consideration. Granules India is among a few global companies offering a product range comprising PH solution in combination with others. It is arguably the only company, which is providing PFI solutions beyond paracetamol at a better margin and that too at batch sizes (six tonnes)", Mr Hotchandani said.

The company's ability to provide tablets in batch sizes has also extended its clout in the outsourcing market.

The company is raising additional fund through issue of warrants to promoters at a price of Rs 102.50 to carry on with the expansion work.

The share capital has increased during the year ended June 30, 2005 on account of a GDR issue (equivalent to 3,761,007 equity shares of face value of Rs. 10 each).

The stock traded at today's closing price at 16 times its trailing four quarter EPS of Rs 7.3. The market capitalisation to sales stands at 0.96.