Granules India Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹823.00+₹11.05 (+1.36%)

DalalBaazaar Score

61 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Low

Driven by small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of Granules India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Granules India Limited manufactures and sells active pharmaceutical ingredients (APIs), pharmaceutical formulation intermediates (PFIs), finished dosages (FDs), and peptides CDMO in India and internationally.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees4,306

Annual revenue₹5,339 Cr

How does it make money?

Turns over ₹5,339 Cr a year. Of every ₹100 of sales, about ₹11 reaches shareholders as profit, with ₹22 left at the operating level before interest, tax and depreciation. Each of its 4,306 employees supports ₹1.24 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.24 Cr

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, DR. REDDY S LABORATORIES, CIPLA LTD, DIVI S LABORATORIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 15.2% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE14.5%

What is the outlook?

7 analysts covering the stock expect revenue to grow about 14.9% and earnings to grow about 26.5% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+14.9%

Est. earnings growth+26.5%

Analysts7

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +19% while net margin moved -3% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+19%

Margin effect-3%

DalalBaazaar Score

61/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 5.9% — barely ahead of inflation
✗ Profit CAGR of only 4.8%

Quality vs. Valuation

Company Quality

62/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

49/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

30.6x

3Y Median

28.9x

40 monthly readings · mean 28.3x · range 14.2x–42.9x

Sector Median

33.3x

median of 4 sector peers

🟡Currently trading close to its 3y median of 28.9x — the market is paying about what it usually pays for this company.

🟡Against its sector it is priced broadly in line with the peer median of 33.3x.

vs. its own history

Fair

28.9x median over 40 months · +6%

vs. sector peers

Fair

33.3x median of 4 peers · -8%

vs. generic bands

Fair

15x–35x

EV/EBITDA

19.7x

PEG

6.34

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 20.2% to 22.0% over 3 years.
Very low debt
Debt/Equity of 0.30x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 18.2% to 11.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 23.4% to 15.2% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 watch

🟡Debt is increasingFinancial
Total debt is up 33% over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 46% against revenue up 19% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 20.2% to 22.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹235 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Growth barely outpaces inflation
Revenue compounding at 5.9% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 18.2% to 11.7%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 20%✓ 22.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✓ 5.9% CAGR
Latest reported year was 22.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹235 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 12%✓ 15.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 5 neutral · 0 weak

Market Cap

₹22,450 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

30.6x

Fair

Fairly valued against the generic band

P/B Ratio

4.01x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹26.92

Profitable

Profitable on a per-share basis

ROE

11.7%

Moderate

Moderate capital efficiency

ROCE

15.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.30x

Low

Conservative leverage

Revenue Growth (YoY)

22.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

53.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.21%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹235 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

21.0x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

17.6%

Good

Healthy core-business profitability

Net Margin

11.8%

Good

Strong bottom-line conversion

Current Ratio

1.80

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.12

Defensive

Steadier than the market

52W Range Position

74%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

838.8 / 849.4

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

38.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹4,496 Cr	₹4,490 Cr	₹4,456 Cr	₹5,339 Cr	+5.9%
EBITDA	₹909 Cr	₹836 Cr	₹925 Cr	₹1,174 Cr	+8.9%
EBITDA Margin	20.2%	18.6%	20.8%	22.0%	—
PAT (Net Profit)	₹517 Cr	₹405 Cr	₹502 Cr	₹595 Cr	+4.8%
EPS	₹21	₹16.72	₹20.68	₹24.46	+5.2%
ROE	18.2%	12.6%	13.5%	11.7%	—
ROCE	23.4%	18.0%	17.0%	15.2%	—
Total Debt	₹1,136 Cr	₹1,315 Cr	₹1,455 Cr	₹1,512 Cr	+10.0%
Free Cash Flow	₹328 Cr	₹59 Cr	₹295 Cr	₹235 Cr	-10.5%

🟢 Revenue has grown at 5.9% a year over 3 years.

🟢 EBITDA has grown at 8.9% a year over 3 years.

🟢 EBITDA Margin has risen from 20.2% to 22.0% over 3 years (+1.8 pts).

🟢 PAT (Net Profit) has grown at 4.8% a year over 3 years.

🟢 EPS has grown at 5.2% a year over 3 years.

🔴 ROE has fallen from 18.2% to 11.7% over 3 years (-6.5 pts).

🔴 ROCE has fallen from 23.4% to 15.2% over 3 years (-8.2 pts).

🔴 Total Debt has grown at 10.0% a year over 3 years.

🔴 Free Cash Flow has shrunk at 10.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹7,720 Cr

Total Liabilities

₹2,635 Cr

Cash & Equivalents

₹880 Cr

Operating Cash Flow

₹793 Cr

Capex

-₹558 Cr

Shareholding (proxy)

Institutional Holding

22.5%

Insider Holding

39.6%

Corporate Actions

Dividend Rate

₹1.75

Ex-Dividend Date

30 Jul 2026

Analyst Consensus

Recommendations

8 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹907.25

+10.2% vs CMP

Target Range

₹588 – ₹1,045

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
DR. REDDY S LABORATORIES	31.0x	8.8%
CIPLA LTD	31.8x	9.8%
DIVI S LABORATORIES LTD	83.0x	17.5%

Recent News

3 mixed3 general

Granules India Ltd. (GRANULES) Share Price Rise Streak: second straight session at Rs 831.55

Univest, 16 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

GRANULES Outlook for the Week

Equitypandit, 09 Oct

GRANULES Forecast — Price Target — Prediction for 2027

TradingView, 26 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Granules India Limited (NSE:GRANULES) Analysts Are Pretty Bullish On The Stock After Recent Results

Simply Wall Street, 24 JulAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Granules India block deal: 5.3% equity worth Rs 1,160 crore changes hands; promoter likely seller

Moneycontrol.com, 11 Sept

Granules India promoter group acquires 9.12% stake via open market

scanx.trade, 25 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Risk

MiddlingProfitability · Valuation

WeakGrowth

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

All 5 tripwires holding · see Key things to watch ↑