Why Granules India a must Buy ?
Granules India and its subsidiaries are a vertically
integrated, high-growth pharmaceutical company with 38 years of proven track
record and increasing presence across the globe. Granules offers collaborative
and strategic partnership to global pharmaceutical leaders by manufacturing and
selling of Active Pharma Ingredients (APIs), Pharmaceutical Formulation
Intermediates (PFIs) and Finished Dosages
Market Cap₹ 9,255 Cr. Current Price₹ 373 Face Value-₹ 1.00
High / Low- ₹ 374 / 227=1.65 -- <2.2 is Good
Stock -P/E 19.1 < Industry 24.3 P/E is Good.
P/E ratio is the most widely used parameter to analyze whether the stock of any company is overvalued or undervalued at any point in time. It is calculated by dividing the current market price (CMP) of stock by profit/earnings per share (EPS).
Dividend Yield-0.40 % > 0 is Good, Higher is better
A financial ratio that shows how much a company pays out in dividends each year relative to its share price. The dividend yield is calculated as annual dividends per share divided by market price per share.
ROCE-17.4 % - ROE-17.5 % > 10% is Good,
Also called Return on net worth, it measures a company’s profitability by revealing how much profit a company generates with the money shareholders have invested, it is calculated by dividing the net profit after tax by shareholder's fund For high growth companies you should expect a higher ROE.
Current ratio-1.35 > 1.25 is Good,
A liquidity ratio that measures a company's ability to pay short-term obligations. The higher the current ratio, the more capable the company is of paying its obligations.
Quick ratio-0.78 > 1 is Good,
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. For this reason, the ratio excludes inventories from current assets
Sales growth-24.1 % -CAGR >15% for last 7-10 years
Growth should be a consistent year on year. Ignore companies where a sudden spurt of sales in one year is confounding the 10 years performance.Very high growth rates of >50% are unsustainable.
Price to Sales-2.21 < 1.5 is Good--James O’Shaughnessy: Buy if P/S ratio is < 1.5 and sell if >3
Price to book value-3.56 For a Good Company - 3 – 6 is Ok &< 4 is very good
A stock is termed as undervalued if it has a lower P/B ratio. A low P/B ratio may also mean a company has some problems with its fundamentals.
Return on assets-10.1 % > 5% is Good, < 5% is Not Good.
Current ratio-1.35 > 1.25 is Good,
A liquidity ratio that measures a company's ability to pay short-term obligations. The higher the current ratio, the more capable the company is of paying its obligations.
Quick ratio-0.78 > 1 is Good,
The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. For this reason, the ratio excludes inventories from current assets
Sales growth-24.1 % -CAGR >15% for last 7-10 years
Growth should be a consistent year on year. Ignore companies where a sudden spurt of sales in one year is confounding the 10 years performance.Very high growth rates of >50% are unsustainable.
Price to Sales-2.21 < 1.5 is Good--James O’Shaughnessy: Buy if P/S ratio is < 1.5 and sell if >3
Price to book value-3.56 For a Good Company - 3 – 6 is Ok &< 4 is very good
A stock is termed as undervalued if it has a lower P/B ratio. A low P/B ratio may also mean a company has some problems with its fundamentals.
Return on assets-10.1 % > 5% is Good, < 5% is Not Good.
An indicator of how efficient management is at using its assets to generate earnings. Calculated by dividing a company’s annual earnings by its total assets
CF Operations₹ 332 Cr. - CFO>0 - Positive CFO necessary
NPM last year-11.1 % >8 is Good--
Look for companies with sustained operating profit & net profit margins over the years
PEG Ratio-0.93 <1 is Good
The price/earnings to growth ratio (PEG ratio) is a stock's price-to-earnings (P/E) ratio divided by the growth rate of its earnings for a specified time period. The PEG ratio is used to determine a stock's value while taking the company's earnings growth into account and is considered to provide a more complete picture than the P/E ratio.
Int Coverage-21.6 > 2 is Good,(For Banks & NBFC this is not Valid)
It is used to determine how easily a company can pay interest on outstanding debt. It is calculated by dividing a company's EBIT by the interest expenses.
Debt to equity-0.41--< 1 is Good,
(For Banks & NBFC this is not Valid)
A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders equity. The debt/equity ratio also depends on the industry in which the company operates.
Promoter holding-41.9 %--> 30% (Must for Promoter)
Higher the better
CF Operations₹ 332 Cr. - CFO>0 - Positive CFO necessary
NPM last year-11.1 % >8 is Good--
Look for companies with sustained operating profit & net profit margins over the years
PEG Ratio-0.93 <1 is Good
The price/earnings to growth ratio (PEG ratio) is a stock's price-to-earnings (P/E) ratio divided by the growth rate of its earnings for a specified time period. The PEG ratio is used to determine a stock's value while taking the company's earnings growth into account and is considered to provide a more complete picture than the P/E ratio.
Int Coverage-21.6 > 2 is Good,(For Banks & NBFC this is not Valid)
It is used to determine how easily a company can pay interest on outstanding debt. It is calculated by dividing a company's EBIT by the interest expenses.
Debt to equity-0.41--< 1 is Good,
(For Banks & NBFC this is not Valid)
A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders equity. The debt/equity ratio also depends on the industry in which the company operates.
Promoter holding-41.9 %--> 30% (Must for Promoter)
Higher the better
Technical View
Technically Granules India able to Breakout Above strong resistance @362.
BUY at this range with Target 500 near term with stop loss 355
