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CMP: 691

Total income from operations 533 Cr 

449 Cr (18.71%) YoY | 460 Cr (15.82%) QoQ 

Half yearly revenue: 994 Cr Vs. 942 Cr (5.52%)

Net Profit of 126.9 Cr 

87.7 Cr (44.69%) YoY 127.5 Cr (-0.47%) QoQ 

Half yearly Net profit: 254 Cr Vs. 173 Cr (47.1%)

EPS (in Rs.) 21.61

15.42 YoY | 22.30 QoQ 

Half yearly EPS: 43.91 Vs. 30.42


Result is overall good and stable. YoY and QoQ revenue and profit both have increased. Operating profit margin also improved as compare with YoY.  

*Business Updates & Highlights*

Q1FY21 EBITDA was around INR 176 Cr Vs. 136 Cr in Q2FY20 Vs. 157.9 Cr in Q1FY21 therefore up by 29.4% in YoY and 11.4% in QoQ . EBITDA margin in Q2FY21 was 33% Vs. 30.3% in Q2FY20 Vs. 34.3% in QoQ. Therefore slightly declined the margin as compare with QoQ. 

Half yearly Sep 2020 EBITDA was around INR 334 Cr Vs. 284 Cr in Sep 2019 therefore up by 17%. EBITDA margin was 33.6% Vs. 30.1% in YoY. 

*Segment wise business performance*

Chemical business contributed in topline in Q2FY21 was 37.6% and topline up by 42% and bottom line up by 312% in YoY. Topline up by 32.2% in QoQ and bottom line up by 173% in QoQ. 

Drugs business contributed in topline in Q2FY21 was 62.2% and topline up by around 14.3% and bottom line for this segment was up by 16.7% in YoY. Topline up by 7% in QoQ and bottom line up by 1.7% in QoQ. 

*The Board of Directors declared Interim Dividend of INR 4 per Equity Share for the Financial Year 2020-21 and fixed 18th November 2020 as Record Date to decide the eligibility of Shareholder for paying the interim dividend*


ROE and ROCE is around 57% and 69% respectively and book value per share is around INR 186 and share is currently trading at 3.7x of its book value. Company is currently trading at annualized PE of around 8 which is fair as per Industry benchmark. Promoter holding in the company is around 43.7% which is good and stable. FIIs hold around 6.4% quarter. The good thing company is continuously reducing their debt and presently virtually debt free now and within two years company was able to achieve this milestone. Operating cash flows in this quarter was around INR 191 Cr Vs. 284 Cr in corresponding previous quarter 

Position: Share strong support price is INR 595. Long term investors should continue with the company with possible target of INR 1000/1200.

Share View: Share price high 830 (52 week) and now 691. IOL chemical 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, anti-convulsants, 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. 


Company is World’s largest producer of the Ibuprofen with an installed capacity of 12,000 TPA and having backward integrated manufacturing facility. Ibuprofen has been one of the key product of the company which as contributed to the company’s revenue by more than 50% over the period of few years. IOL’s total capacity of Ibuprofen is 12000 ton as on May 31, 2020 which is 28.57% of the global demand of the API in terms of capacity. The government is also considering increasing the import duty on APIs to 20-25% from the current 10% to help boost local manufacturing of the bulk drugs which will give direct benefit to IOL chemical which is significant player in this field. Company last 5 years sales growth was around 35% and profit growth was 49% and return on equity for last 5 years was 38%. Expansion in the manufacturing facility amid supply constraints leading to increased demand of its two major products viz. Ibuprofen (API) and Ethyl Acetate. The two major products that contribute 82% to the total sales are Ibuprofen and Ethyl Acetate.  Company has also started to pay the dividend for past 1 year.


The pharmaceutical industry is highly regulated in many other countries and requires various approvals, licenses, registrations and permissions for business activities. Any delay or failure in getting approval for new product launch could adversely affect the business prospect of the company. IOL chemical heavily concentrated on few APIs. Volatility in raw material prices can impact in bottom line as currently dependent upon domestic markets about 70% of their raw material needs. 

Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares. 

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