Granules India earmarks capex of Rs 1,000 crore till FY24

NEW DELHI: Drug firm has earmarked a capex of around Rs 1,000 crore which it aims to invest over the next three financial years on expansion of operations, according to a top company official.

The Hyderabad-based firm plans to invest in a new manufacturing facility and on expanding production capacities at existing plants.

“During FY22, we expect to spend Rs 400 crore and the rest of the Rs 600 crore is spread over FY23 and FY24,” Granules India Chairman and Managing Director Krishna Prasad Chigurupati said in an analyst call.

The drug firm plans to invest about Rs 180 crore on a Multiple Units Pellet System (MUPS) block, around Rs 250 crore on expanding active pharmaceutical ingredients (API) capacity, Rs 320 crore on a new formulation plant and another Rs 30 crore on expansion of a facility near Hyderabad which rolls out paracetamol and metformin, he noted.

“And then there is maintenance capex. So this is a broad breakup of what we are doing. There’s very clear visibility, and we are very excited that we’re going to invest all this cash. And all this, like I’ve been repeatedly saying, we are very confident we can meet with our internal accruals. And I don’t see the need for any debt going forward,” Chigurupati said.

The company, which manufactures several off-patent drugs, including paracetamol, ibuprofen, metformin and guaifenesin on a large scale for customers in the regulated and rest of the world markets, also aims to invest in the range of Rs 150 crore on R&D activities every year.

“Going forward, we plan on spending about a minimum of Rs 150 crore every year,” Granules India Executive Director Priyanka Chigurupati noted.

Bullish on demand scenario, the company said it expects 15-20 per cent revenue growth in the current fiscal as compared with FY21.

The company’s revenue stood at Rs 3,238 crore for the 2020-21 financial year while its net profit was at Rs 549 crore for the period.