Granules India Q3 profit rises amid soft raw material cost

Paracetamol maker Granules India posted a marginal rise in its third-quarter profit on Tuesday, benefiting from a reduction in raw material expenses. According to an exchange filing, the company's consolidated profit increased by 1.6 per cent to Rs 126 crore.

Granules has faced a slowdown in profit growth since the third quarter of 2022, with the last two quarters seeing a decline due to escalating costs. For the third quarter, the company recorded a 0.6 per cent rise in expenses, supported by a 7 per cent decrease in raw material costs. This contrasts with expense increases ranging between 9 per cent and 17 per cent in the previous four quarters, resulting in a flat year-on-year profit margin at 11 per cent.

Revenue saw 1 per cent growth, hitting Rs 1,156 crore, with the fixed dosages segment contributing 66 per cent to the total. Granules specialises in manufacturing active pharmaceutical ingredients (API) and holds a 30 per cent share in the global market for Paracetamol, producing both the drug's API and finished dosage.

Following the results, shares of the company initially rose by 3.2 per cent, later paring some gains to trade 2.9 per cent higher. During the December quarter, the company's shares climbed approximately 14 per cent, outperforming the Nifty Pharma index, which rose by 9 per cent.

(With Reuters inputs)