MoneyWorks4Me

Check Before You Invest : Granules India Ltd

BSE: 532482 NSE: GRANULES ISIN: INE101D01020
  |   Sector:  Healthcare   |   Industry:  Pharmaceuticals & Drugs

Snapshot

Q.1 Which industry/sub-sector does Granules India Ltd belong to?
Granules India Ltd belongs to the Healthcare sector, operating specifically within the Pharmaceuticals & Drugs segment.
Q.2 Is Granules India Ltd a good quality company?
Granules India Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Granules India Ltd undervalued or overvalued?
Granules India Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 52.92 21.58
Price to Book 5.19 3.48
Price to Sales 6.32 2.69
EV to EBITDA 28.57 13.19
Q.4 Is Granules India Ltd a good buy now?
Granules India Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Granules India Ltd?
Granules India Ltd revenue growth is 14.7% for FY-2026, which is above its 5-year CAGR of 2.07%, indicating faster growth.

Q.2 Gross Profit margin of Granules India Ltd?
Granules India Ltd Gross profit margin which is the profit after deduction of direct costs, is 20.1% for FY-2026, which is in line with its 5-year median of 19.9%, indicating stable margins.

Q.3 Operating Profit Margin of Granules India Ltd?
Granules India Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 20.99% for FY-2026, which is in line with its 5-year median of 20.99% indicating stable margins.

Q.4 Net Profit Margin of Granules India Ltd?
Granules India Ltd Net Profit Margin is 11.53% for FY-2026, is in line with its 5-year median of 11.61%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 20.1 19.9
Operating Profit Margin (%) 20.99 20.99
Net Profit Margin (%) 11.53 11.61

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Granules India Ltd?
Granules India Ltd Return on Asset is 7.2%, which is below its 5-year historical median of 9.17%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Granules India Ltd?
Granules India Ltd Return on capital employed is 12.78% for FY-2026, which is below its 5-year historical median of 16.29%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 13.5%, indicating value preservation.

Q.7 Return on Equity (ROE) of Granules India Ltd?
Granules India Ltd Return on equity is 10.8% for FY-2026, which is below its 5-year historical median of 15.08%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Granules India Ltd?
Granules India Ltd Cash conversion cycle is 122 days, in line with its 5-year historical median of 117 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.64 0.79
ROE (%) 10.8 15.08
ROCE (%) 12.78 16.29
Cash Conversion Cycle 122 days 117 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Granules India Ltd?
Granules India Ltd Debt-to-Equity ratio is 0.18, which is above the industry average of 0.14, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Granules India Ltd?
Granules India Ltd Debt to cash flow from operations is 1.14, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Granules India Ltd?

Q.1 Promoter shareholding and pledge status of Granules India Ltd?
Promoters hold 38.02% of the Granules India Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Granules India Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Granules India Ltd vs industry peers?
Granules India Ltd revenue CAGR is 2.07%, compared to the industry median CAGR of 5.68%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 14.7 5.7
Gross Profit Growth (%) 31.1 11.9
Operating Profit Growth (%) 28.1 10.8
Net Profit Growth (%) 25.7 12.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.64 0.79
ROE (%) 10.8 8.63
ROCE (%) 12.78 10.85
Cash Conversion Cycle (days) 122.26 76

Valuation & price assessment

Q.1 Stock return of Granules India Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 20.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
20.4% 18.2% 42% 88.6%
Q.2 Valuation ratios of Granules India Ltd vs historical?
The current P/E ratio of 52.92 is higher than its historical median of 21.58, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 52.92 21.58 31.09
Price to Book 5.19 3.48 2.85
Price to Sales 6.32 2.69 2.82
EV to EBITDA 28.57 13.19 15.99

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