BUY : GRANULES-EQ( GRANULES ) [11872]

Investment Thesis:
• Vertical Integration & Scale: Granules’ fully vertically integrated model (API to PFI to FD) in key high-volume molecules (e.g., Paracetamol, Metformin, Ibuprofen) provides a sustainable cost advantage and supply chain security.
• Formulation-led Growth: The strategic shift towards high-margin Finished Dosages (FD) and complex generics in regulated markets (US, Europe) is expected to continue driving higher operating margins and profitability.
• Resolution of Regulatory Headwinds: The ongoing remediation efforts at the Gagillapur facility, following the US FDA Warning Letter, are expected to pave the way for a resolution, removing a major overhang and enabling a P/E re-rating.
• Strategic Expansion: Acquisitions like Senn Chemicals for peptides and capacity expansion in Genome Valley position the company for growth in complex, high-entry-barrier products.
Buy Call on Granules_6 Oct 2025