Granules India Expects 80% Jump In FY21 Profit, Says Chairman Krishna Prasad

Granules India Ltd. remains bullish on growth prospects after its earnings improved on all parameters in the quarter ended September.

The pharmaceuticals company expects this growth momentum to continue, Krishna Prasad Chigurupati, founder chairman and managing director, said in an interview with BloombergQuint. “We'll be able to maintain earnings before interest, tax, depreciation and amortisation, though margins can vary. We expect profit after tax to grow 80% year on year in FY21."

Prasad is upbeat on new product launches to boost margins. “Six products have been approved and will be launched in coming two quarters. Expect more approvals in third quarter which will be launched in fourth quarter or first quarter next year," he said. "We have clear visibility on what products are going to give us this margin."

Granules India expects its formulations business to account for 70% of its business over the next two years.

It's looking at Rs 400 crore worth of capital expenditure this and next year. “It’ll be out of internal accruals and we are not looking at raising any debt,” Prasad said.

He also expects to clock in at least 30% return on capital employed by the end of the year. The company reported 33.2% RoCE in the second quarter.

Granules India' revenue rose 23% over a year earlier to Rs 858 crore in the quarter ended September, while net profit jumped 71% to Rs 164 crore. Margin improved to 29.8% from 20.5%.

“Expenses were under control, product mix was very favourable, we were able to make more profitable products," Prasad said. "New launches had really picked up and market share had done better than expected. These were main growth riders.”

Watch the full interview here: