(Reuters) -Granules India reported a drop in fourth-quarter adjusted profit on Wednesday, hurt by weak pricing and stiff competition in its key European and North American markets.
Profit before exceptional items and tax fell to 1.67 billion rupees ($19.6 million) for the quarter ended March 31, from 1.76 billion rupees a year earlier.
The drugmaker logged a one-time gain of 307.5 million rupees related to an insurance claim it received during the reported quarter. Including the gain, consolidated profit rose 17%.
Granules, which generates about two-thirds of its revenue from North America and 19% from Europe, posted a 2% rise in its revenue from operations.
For further earnings highlights, click.
KEY CONTEXT
Granules, which holds a 30% share of the global paracetamol market, supplies the drug as an active pharmaceutical ingredient (API) and as a ready for consumption form in Europe, Canada, and South Africa. APIs are the active and key components in a drug that produce the intended therapeutic effects.
Indian API makers have been grappling with weak pricing in key European and North American markets due to tough competition, even as global drugmakers turn to India to limit their reliance on Chinese contractors.
PEER COMPARISON
Valuation (next Estimates (next 12 Analysts’ sentiment
12 months) months)
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth (%) rating* analysts price yield
target** (%)
Granules India 20.33 11.53 13.86 27.62 Strong 4 0.82 0.29
Buy
Alivus Life 23.32 16.46 10.87 12.96 Strong 2 0.86 2.04
Sciences Buy
Laurus Labs <LAUL.NS 53.89 23.24 16.72 58.70 Hold 11 1.01 0.20
Divi’s Laboratories 67.54 45.72 17.10 22.97 Hold 24 1.11 0.45
* 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
JANUARY TO MARCH STOCK PERFORMANCE
— All data from LSEG
— $1 = 85.3790 Indian rupees
(Reporting by Kashish Tandon in Bengaluru; Editing by Rashmi Aich)
