Granules India (532482) Q1 24/25 earnings summary

Executive summary

• Achieved strong Q1 FY2025 growth, with consolidated revenue rising to ₹11,799 million, driven by robust formulations sales, new product launches, and geographic expansion, especially in North America.

• Profit after tax increased to ₹1,346 million, up 181% year-over-year, with improved margins and operating cash flow.

• FD (Finished Dosage) share rose to 76% of sales, with new products beyond the legacy five contributing 35% to Q1 revenue.

• Sustainability initiatives advanced, including climate action goals submitted to SBTi and enhanced ESG disclosures.

• Information security measures were strengthened following a significant incident in Q1 FY24.

Financial highlights

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

• Value added as a percentage of sales increased to 58.9% from 51.4% in Q1 FY2024, reflecting higher FD sales and lower raw material costs.

• Operational cash flow was ₹2,161 million, up from ₹35 million in Q1 FY2024; net debt reduced by ₹481 million.

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

• Basic EPS (consolidated) for the quarter was ₹5.56, up from ₹1.98 in Q1 FY24.

Outlook and guidance

• FD contribution expected to remain stable or grow, with API and PFI segments likely to decline as focus shifts to formulations.

• Gross margin of 58-59% and EBITDA margin above 20% seen as sustainable; second half of FY2025 expected to be stronger as new capacity ramps up.

• Paracetamol API sales expected to remain weak until end of FY2025, with recovery anticipated next year.

• Continued focus on expanding the product pipeline, especially in North America, and investing in R&D and sustainability.

• Enhanced information security measures to mitigate future risks.