As per the company website, IOL Chemicals and Pharmaceuticals Limited (IOLCP) is a leading organic chemicals manufacturer and supplier. We are an Indian manufacturer of industrial chemicals & bulk drugs for over two decades. By pursuing & implementing the highest standards of excellence in our operations, we have nurtured our capabilities.
IOL CP - Q4 FY20 (Audited –Cons)
CMP: 409
Total income from operations 441.4 Cr
422.2 Cr (4.52%) YoY | 511.2 Cr (-13.72%) QoQ
Year ending revenue: 1,894 Cr Vs. 1,685 Cr (12.41%)
Net Profit of 90.2 Cr
101.6 Cr (-10.87%) YoY 98.01 Cr (-8.13%) QoQ
Year ending Net profit: 361.2 Cr Vs. 236.7 Cr (52.91%)
EPS (in Rs.) 15.74
17.22 YoY | 18.08 QoQ
Year ending EPS: 63.38 Vs. 42.11
View: Average result and below expectation. YoY revenue marginally
increased and profit declined in YoY. QoQ also revenue and profit both have
declined.
Business Updates & Highlights:
Q4FY20 EBITDA is around INR 142.2 Cr Vs. 159.3 Cr in Q4FY19 Vs. 163.4 Cr in
Q3FY20 therefore declined by 11% in YoY and 13% in QoQ. EBITDA margin is
32.1% Vs. 37.7% in Q4FY19 Vs. 31.9% in Q3FY20.
FY20 EBITDA to Rs. 589.9 Vs. 420.02 Cr in FY19 therefore up by 40% in YoY.
EBITDA margin of 31.1% Vs. 24.9% in FY19.
Finance cost in Q4FY20 2.7 Cr Vs. 8.8 Cr in Q4FY19 therefore declined by
69.3% in YoY (Very Positive).
Key business updates
Company is primarily two operating segment viz. Chemicals – 34.7% and Drugs
– 64.7%
Q4FY20 YoY topline growth for Chemical – (19%) and Drugs – (2.3%). Q4FY20
bottom line growth for Chemicals – (55.3%) and Drugs – (10%).
Financial
ROE and ROCE is around 69% and 55% respectively and book value per share is
around INR 143 and share is currently trading at 2.9x of its book value.
Company is currently trading at annualized PE of around 6.5 which is very
fair as per Industry benchmark. Promoter holding is around 41.9% in the
company which is good and stable in QoQ. FIIs and mutual fund hold around
2.6% and 0.02% in the company. Cash and cash equivalent from operating
activities as of March 2020 is around INR 471 Cr Vs. 237 Cr as of March
2019. Liquidity and realization position is also good in the company.
Position: Share strong support price is INR 372/350. Long term investor
should continue with the company.
Share View: Share price high 424 (52 week) and now 409. Company) is one of
the leading APIs/ bulk drugs Company and is significant player in the
specialty chemicals space with world class facilities. IOLCP has wide
presence across major therapeutic categories like, Pain Management,
anticonvulsants, anti-diabetes, anti- cholesterol and anti-platelets.
IOLCP's product portfolio includes APIs; Ibuprofen, Metformin, Fenofibrate,
Clopidogrel, Lamotrigine, Pantoprazole and specialty chemicals such as
Ethyl Acetate, Iso Butyl Benzene, Mono Chloro Acetic Acid and Acetyl
Chloride.
Opportunities: Share has given strong performance and continuously reached
new peak despite in negative market. The good thing is company is
continuously reducing their debt via prepayment of loan. Company is World's
largest producer of the Ibuprofen with an installed capacity of 12,000 TPA
and having backward integrated manufacturing facility. Products are sold
primarily to Branded Generic formulators both in India & Overseas. The
Company has DSIR approved R&D which is fully equipped to validate existing
processes. Valuation is very reasonable and currently its trading around
6.5 PE.
Risk: The world's requirement of the drug, with 10 per cent was coming from
China's Hubei Biocause Pharmaceutical Co. Prices of ibuprofen have risen by
$3 per kilogram and reached the peak $18 per KG in the month of Feb 20 and
due to this company share has also risen sharply. Now ibuprofen prices
hovering around $14-$15 per KG. Topline marginally increased in this
quarter and EBITDA also decreased by 11% in YoY and 13% in QoQ.
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IOL CP - Q4 FY20 (Audited –Cons)
CMP: 409
Total income from operations 441.4 Cr
422.2 Cr (4.52%) YoY | 511.2 Cr (-13.72%) QoQ
Year ending revenue: 1,894 Cr Vs. 1,685 Cr (12.41%)
Net Profit of 90.2 Cr
101.6 Cr (-10.87%) YoY 98.01 Cr (-8.13%) QoQ
Year ending Net profit: 361.2 Cr Vs. 236.7 Cr (52.91%)
EPS (in Rs.) 15.74
17.22 YoY | 18.08 QoQ
Year ending EPS: 63.38 Vs. 42.11
View: Average result and below expectation. YoY revenue marginally
increased and profit declined in YoY. QoQ also revenue and profit both have
declined.
Business Updates & Highlights:
Q4FY20 EBITDA is around INR 142.2 Cr Vs. 159.3 Cr in Q4FY19 Vs. 163.4 Cr in
Q3FY20 therefore declined by 11% in YoY and 13% in QoQ. EBITDA margin is
32.1% Vs. 37.7% in Q4FY19 Vs. 31.9% in Q3FY20.
FY20 EBITDA to Rs. 589.9 Vs. 420.02 Cr in FY19 therefore up by 40% in YoY.
EBITDA margin of 31.1% Vs. 24.9% in FY19.
Finance cost in Q4FY20 2.7 Cr Vs. 8.8 Cr in Q4FY19 therefore declined by
69.3% in YoY (Very Positive).
Key business updates
Company is primarily two operating segment viz. Chemicals – 34.7% and Drugs
– 64.7%
Q4FY20 YoY topline growth for Chemical – (19%) and Drugs – (2.3%). Q4FY20
bottom line growth for Chemicals – (55.3%) and Drugs – (10%).
Financial
ROE and ROCE is around 69% and 55% respectively and book value per share is
around INR 143 and share is currently trading at 2.9x of its book value.
Company is currently trading at annualized PE of around 6.5 which is very
fair as per Industry benchmark. Promoter holding is around 41.9% in the
company which is good and stable in QoQ. FIIs and mutual fund hold around
2.6% and 0.02% in the company. Cash and cash equivalent from operating
activities as of March 2020 is around INR 471 Cr Vs. 237 Cr as of March
2019. Liquidity and realization position is also good in the company.
Position: Share strong support price is INR 372/350. Long term investor
should continue with the company.
Share View: Share price high 424 (52 week) and now 409. Company) is one of
the leading APIs/ bulk drugs Company and is significant player in the
specialty chemicals space with world class facilities. IOLCP has wide
presence across major therapeutic categories like, Pain Management,
anticonvulsants, anti-diabetes, anti- cholesterol and anti-platelets.
IOLCP's product portfolio includes APIs; Ibuprofen, Metformin, Fenofibrate,
Clopidogrel, Lamotrigine, Pantoprazole and specialty chemicals such as
Ethyl Acetate, Iso Butyl Benzene, Mono Chloro Acetic Acid and Acetyl
Chloride.
Opportunities: Share has given strong performance and continuously reached
new peak despite in negative market. The good thing is company is
continuously reducing their debt via prepayment of loan. Company is World's
largest producer of the Ibuprofen with an installed capacity of 12,000 TPA
and having backward integrated manufacturing facility. Products are sold
primarily to Branded Generic formulators both in India & Overseas. The
Company has DSIR approved R&D which is fully equipped to validate existing
processes. Valuation is very reasonable and currently its trading around
6.5 PE.
Risk: The world's requirement of the drug, with 10 per cent was coming from
China's Hubei Biocause Pharmaceutical Co. Prices of ibuprofen have risen by
$3 per kilogram and reached the peak $18 per KG in the month of Feb 20 and
due to this company share has also risen sharply. Now ibuprofen prices
hovering around $14-$15 per KG. Topline marginally increased in this
quarter and EBITDA also decreased by 11% in YoY and 13% in QoQ.
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