Granules India (532482) Q1 24/25 earnings summary

Executive summary

• Achieved robust Q1 FY2025 performance with consolidated revenue of ₹11,799 million, returning to planned growth trajectory after prior setbacks, driven by new product launches, geographic expansion, and strong North America performance.

• FD (Finished Dosage) share rose to 76% of sales, up from 65% in FY2024 and 55% in FY2023, reflecting strategic focus; new products beyond legacy five contributed 35% to Q1 revenue.

• Profit for the period (consolidated) rose to ₹1,346.48 million from ₹478.95 million in Q1 FY24, with PAT margin at 11.4%.

• U.S. remains the primary growth driver, with investments in local manufacturing and packaging yielding strong results; new launches included Colchicine and Esomeprazole capsules.

• Sustainability initiatives advanced, including SBTi-aligned climate goals, net zero roadmap, and pilot green chemistry projects.

Financial highlights

• Q1 FY2025 revenue was ₹11,799 million, up 20% year-over-year; EBITDA reached ₹2,593 million (22% margin), up 89% year-over-year; PAT increased 181% year-over-year to ₹1,346 million.

• Value added as a percentage of sales rose to 58.9% from 51.4% in Q1 FY2024.

• Net debt stood at ₹7,941 million, with a decrease of ₹481 million during the quarter; net debt to EBITDA improved to 0.77x.

• Operational cash flow was ₹2,161 million, up from ₹35 million in Q1 FY2024; CapEx was ₹1,444 million, mainly for Granules Life Sciences.

• ROCE improved to 19.6% from 9.4% in Q1 FY2024 and 16.5% in Q4 FY2024.

Outlook and guidance

• FD contribution expected to remain stable or grow further, with API and PFI segments likely to decline as FD launches increase.

• Gross margin expected to sustain around 58-59%, with EBITDA margin above 20% and potential for further improvement.

• No specific revenue guidance, but trajectory expected to improve; paracetamol recovery anticipated next year.

• Second half of FY2025 expected to be stronger as new capacities ramp up and new launches in North America drive growth.

• Continued focus on expanding product portfolio, innovation, and sustainability initiatives.