Can granules India use its strong product pipeline to compensate for recent profit?

Et Intelligence Group: The stock of Granules India has shown a marginal recovery of 5% since 11 August, despite lower absolute profit and margins reported by the pharmaceutical company in the quarter of June.

This has also reduced its loss of one month on the Bourses to around 7%.

Investor optimism depends on the strong product pipeline of the company and the expected stabilization in the recently acquired companies. The company has led to better growth rates in FY27 compared to the current tax year.

In Europe, Granules has six products awaiting approval in the coming quarters. The company continues to spend large volume products in the central nervous system (CNS) Attention Deficit Hyperactivity Disorder (ADHD) therapy and oncology.

Granules acquired Senn Chemicals AG, a peptid maker based in Switzerland, with a operating value of £ 450 Crore in early 2025. Granules focuses on an extra investment of £ 100 crore in this facility and £ 20-30 crore to R&D laboratory in FY26. For FY27, Capex is for production extension.

The One -Facility of Granules in Hyderabad will become operational by October and a different facility for commercial scale is the target to complete at the end of FY27. The R&D facilities in India will have both peptides synthesis and characterization. It means that the characterization will take place in India, even if the development of medicines takes place in Switzerland. The company is of the opinion that it will be a cost -efficient source outside of China. The Gagillapur facility, one of the largest production sites for one unit for PFIs and finished doses, is located in the last phases of remediation with the US FDA with a fourth status report that is submitted in July and so far no worries are received. It has cleared inspections by the German and Danish authorities, with Denmark granting an EU GMP certificate in July 2025. On an annual basis, the turnover of granules from activities, including Senn Chemicals (£ 29.1 crore) grew by 3% to £ 1,210.1 crore, driven by 7% and 12% increase in North America and Europe. Net profit, however, fell by 16% to £ 112.6 Crore in the quarter of June 2025. EBITDA -Marge fell to 20.4% in June 2025 of 22% a year ago, due to higher manpower costs with consolidation of Senn Chemicals, which is expected to stabilize. Motilal Oswal Financial Services has reduced the profit estimates by 5% and 2% for FY26 and FY27 due to the increased timeline for approvals of Gagillapur facility, lower sales in some of the markets as a result of delivery backlog. “Although it tackles the compliance aspect on the Gagillapur site in an extensive way, it is efforts to add differentiated products to his portfolio to improve the growth prospects,” it added.