Fundamental

GRANULES INDIA

Ticker : 532482 
BUY: Rs. 116
Target: Rs. 130

Granules India is a vertically integrated pharmaceutical company that manufactures active pharmaceutical ingredients (API), pharmaceutical formulation intermediate (PFI) and finished dosages (FD). In Q3FY19, the consolidated net sales for the company stood at Rs 631.77 crore, up 53.8 per cent YoY from Rs 410.7 crore last year. The net profit for the company stood at Rs 60 crore, up 72.3 per cent from Rs 35 crore in Q3FY18. The EBITDA margin came in flat at 18 per cent, the same as last year. The FD, API and PFI segments registered growth of 88 per cent, 45 per cent and 9 per cent YoY, respectively. The formulations business is set to witness a ramp up and the expanded API capacities should witness higher realisations post regulatory approvals. Thus, we recommend it as a BUY.



SOBHA LTD

Ticker : 532784
BUY: Rs. 456.50
Target: Rs. 525

Sobha is a leading real estate developer and is engaged in manufacturing activities related to interior glazing, metal works and concrete products. The company operates in two segments, namely, construction and development of commercial and residential real estate projects and contractual projects. In Q3FY19, the company’s revenues came in at Rs 772.3 crore, up 18.43 per cent YoY as against Rs. 652.1 crore last year. The company’s net profit stood at Rs 71.1 crore in Q3FY19 as against Rs. 44.7 crore last year, registering a growth of 59 per cent YoY. The company is planning new launches of 7.7 mn sq. ft. over the next 12 months. Its GIFT City project has already received major approvals. As other developers are facing liquidity crunch, Sobha is expected to continue to gain market share even as the overall market remains tepid. Thus, we recommend a BUY.