(Reuters) -Paracetamol maker Granules India reported a first-quarter profit fall on Tuesday, as a supply backlog hit sales.
Consolidated profit fell 16.3% to 1.13 billion rupees ($12.9 million) for the quarter ended June 30, and revenue grew 2.6% to 12.1 billion rupees.
The Hyderabad-based drugmaker’s North America business, which accounts for more than three-fourths of its revenue, grew 7% year-on-year, while revenue from Europe rose 12%.
But that was not enough to cushion the 30% fall in revenue from outside these top two markets of the company.
For further earnings highlights, click (Full Story).
KEY CONTEXT
Granules holds a 30% global market share of the paracetamol drug, which is used to treat fever and moderate pain. It supplies the drug as an active pharmaceutical ingredient (API) as well as in finished dosage form.
The company said manufacturing at its Gagillapur facility in Telangana was impacted following an adverse U.S. Food and Drug Administration review last year.
Indian drugmakers are also grappling with pricing pressure in the key North American market due to intense competition, while also bracing for a potential hike in U.S. tariffs on pharmaceutical products from India.
PEER COMPARISON
Valuation (next 12 Estimates Analysts’ sentiment
months) (next 12 months)
RIC PE EV/EBI Price/ Revenue Profit Mean # of Stock to Div
TDA Sales growth growth rating* analyst price yield
s target** (%)
Granules India Ltd GRAN. 17.35 9.79 NULL 14.69 21.00 Strong 4 0.73 0.34
NS Buy
Alivus Life ALIV. 20.01 13.83 NULL 10.54 10.53 Strong 3 0.73 2.41
Sciences Ltd NS Buy
Laurus Labs Ltd LAUL. 70.99 27.98 NULL 16.49 58.07 Hold 12 1.13 0.15
NS
Divi’s DIVI. 55.31 39.74 14.70 14.38 19.44 Hold 23 0.94 0.51
Laboratories Ltd NS
* Mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
APRIL-JUNE STOCK PERFORMANCE
— All data from LSEG
— $1 = 87.6425 Indian rupees
(Reporting by Vijay Malkar in Bengaluru; Editing by Harikrishnan Nair)
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