Granules India (532482) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 revenue was INR 11,377 million, down 2% year-over-year but up 18% sequentially, with operations impacted by a voluntary pause at the Gagillapur facility following a US FDA inspection; manufacturing resumed in October 2024.

• 90% of CAPAs from the FDA inspection at Gagillapur are complete, with closure targeted by March 25; ongoing transparent engagement with FDA and customers.

• Leadership strengthened with new Global Head of Quality and Head of Formulation Operations.

• New product launches and approvals included Trazodone Hydrochloride in the USA and approvals for Bupropion SR Tabs and Lisdexamphetamine Chew Tabs.

• Growth strategy remains robust, driven by new launches from US GPI facility, expansion in Europe, and new Genome Valley plant.

Financial highlights

• Q3 FY25 revenue at INR 11,377 million, down 2% year-over-year but up 18% sequentially from Q2 FY25.

• Gross margin for Q3 FY25 at 61.7%, up 474 bps year-over-year, but down 20 bps sequentially.

• EBITDA at INR 2,303 million (20.2% margin), down from 21.7% in Q3 FY24; margin impacted by remediation and airfreight costs.

• PAT for Q3 FY25 was INR 1,176 million, a 6% decrease year-over-year but a 21% increase sequentially.

• Cash flow from operations stood at INR 1,301 million for the quarter.

Outlook and guidance

• Long-term revenue CAGR expected to remain above 20%.

• FY26 projected to see strong growth, aided by GLS plant and European inspection; 20% growth targeted.

• EBITDA margin expected in the 20-22% range, with one-off costs reducing in coming quarters.

• Four to five new product launches from GPI site planned for Q4; some launches from Gagillapur may be delayed.

• Sustained focus on formulations is expected to support margins, while API/PFI segments face ongoing price erosion and lower demand.