Granules India Limited , a prominent player in the pharmaceutical manufacturing sector, has announced a significant development regarding its API Unit-I facility located in Bonthapally, Hyderabad. The company has received an Establishment Inspection Report (EIR) from the U.S. Food and Drug Administration (FDA) with a 'Voluntary Action Indicated' (VAI) classification.

Inspection Details

The inspection resulted in a single observation. Granules India promptly addressed this observation and submitted its response within the stipulated timeframe. The subsequent receipt of the EIR with a VAI classification underscores the company's commitment to maintaining high-quality standards in its manufacturing operations.

Facility Significance

The Bonthapally API Unit-I is noteworthy for several reasons:

• It is one of the world's largest single-site Paracetamol API manufacturing plants by volume.
• The facility also houses manufacturing plants for Metformin and Guaifenesin APIs.

Management's Perspective

Dr. Krishna Prasad Chigurupati, Chairman & Managing Director of Granules India, commented on the development, stating, "The successful completion of this US FDA inspection and the subsequent receipt of the EIR with a satisfactory VAI classification reflects our commitment to maintaining the highest quality standards in our manufacturing operations."

Company Overview

Granules India Limited, incorporated in 1991, is a vertically integrated pharmaceutical company headquartered in Hyderabad. The company's operations span the entire pharmaceutical value chain, including:

• Active Pharmaceutical Ingredients (APIs)
• Pharmaceutical Formulation Intermediates (PFIs)
• Finished Dosages (FDs)

Global Presence

This latest development reinforces Granules India's position as a quality-focused pharmaceutical manufacturer with a strong global presence. The VAI classification from the US FDA for its Bonthapally API unit is likely to bolster confidence among the company's international clients and regulatory bodies.

Granules India Limited , a prominent pharmaceutical company, has reported a 3% year-over-year increase in revenue for the first quarter, reaching Rs. 12,101.00 million. The company's performance reflects a mix of challenges and strategic initiatives aimed at future growth.

Financial Highlights

• Revenue: Rs. 12,101.00 million, up 3% year-over-year
• Gross Margin: Improved significantly to 64.90%, up 593 basis points year-over-year
• EBITDA Margin: Declined to 20.40%
• Net Debt: Increased to Rs. 9,480.00 million following the Senn Chemicals acquisition

Operational Updates

FDA Remediation Progress

Granules India is in the final stages of remediation at its Gagillapur facility following a US FDA inspection and subsequent warning letter. The company expects to engage with the FDA for a re-inspection by December 2025, with potential clearance shortly after.

New Facility Approval

The company's new formulations facility at Genome Valley, under Granules Life Sciences, successfully cleared its first FDA pre-approval inspection. This facility adds 10 billion doses of formulation capacity, representing a 40% increase over the existing capacity at Gagillapur.

Strategic Expansion

Granules has entered the high-growth peptide therapeutics and CDMO space through the acquisition of Senn Chemicals and the creation of Ascelis Peptides. This move positions the company in a market projected to surpass $130.00 billion by 2030.

Future Outlook

Dr. Krishna Prasad Chigurupati, Chairman and Managing Director, stated, "We are entering the phase of reviving our growth with a stronger quality foundation, expanded capacity, and a more diversified portfolio." The company expects strong growth, driven by:

1. Ramp-up of the Genome Valley facility
2. Growth in US operations
3. Expansion in Europe
4. Normalization of operations at Gagillapur post-remediation

Segment Performance

• North America: Experienced year-on-year growth
• Europe: Grew sequentially, with expectations to reach 15-20% of revenue in the future
• Rest of World (ROW): Lower sales primarily due to PFI supply backlog from Gagillapur

R&D and Future Initiatives

Granules is focusing on ADHD and oncology as key therapeutic areas, with R&D expenses at 5.60% of sales. The company is also working on global expansion of its products and has several first-to-file opportunities in the pipeline.

Peptides and CDMO Growth Platform

The acquisition of Senn Chemicals positions Granules as a player in the rapidly growing peptide market. Sanjay Kumar, Chief Strategy Officer, highlighted the company's "Four Strategic Pillars" approach:

1. Prioritizing CDMO arm to engage with top innovators
2. Creating a backbone of amino acid derivatives and peptide fragments in India
3. Building a dual-site manufacturing network for high-value peptide APIs
4. Expanding into niche segments like Cosmetics and Theragnostics

As Granules India navigates through its current challenges, the company appears poised for potential growth, leveraging its expanded capacities, strategic acquisitions, and focus on high-value segments in the pharmaceutical industry.