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1. IOL Chemicals &
Pharmaceuticals Ltd.
2021 Multibagger
Analysis
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2. About IOL
CHEMICALS &
PHARMACEUTICAL
IOL Chemicals and Pharmaceuticals
Ltd., Which was incorporated in the year
1986, is a Small Cap company (Having
a market cap of Rs 3,406.39 Crore)
operating in the Pharmaceuticals sector.
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3. IOL Chemicals and Pharmaceuticals
Limited (IOLCP) is a leading organic chemicals
manufacturer and supplier. IOLCP is an Indian
manufacturer of industrial chemicals & bulk Drugs for
over two decades. IOLCP has a wide presence across
various therapeutic categories.
03 Anti Hypertensive
01 Pain Management
02 Anti Diabetic
04 Anti Convulsant
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4. HOW they work ?
IOL Chemicals & Pharmaceuticals Ltd Innovative
Strengths & Strong Growth have made them the
market leaders. They have built up our expertise
responding to diverse customer requirements
Through a relentless focus on Quality and Commitment
& Delivery. IOL Chemicals & Pharmaceuticals Ltd have
charted their way to success in our operations and
have won the admiration of our customers and
investors.
Their success is built on the strong foundations of
innovation, quality, & dedicated customer service.
By incorporating these & other business strategies
They have boosted the company's capabilities to
maintain the leading edge in the industry & earn the
loyalty of customers.
0
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5. PRODUCTS
85% 35% 65% 45%
The Specialty
Chemicals division
produces Ethyl
Acetate from organic
alcohol for use in a
variety of different
products, including
flexible packaging,
pharmaceuticals,
textiles, food
processing, pesticides
and paint industries.
Specialty
Chemicals:
Under API division in Pain
Management and its
derivative and salts, in
Lifestyle Drugs Metformin
Hydrochloride, Lamotrigine,
Fenofibrate Clopidogrel
Bisulphate Ursodeoxycholic
acid and many more are
developed for commercial
distribution across the
globe. The company is
focusing on generic product
development and cost-
effective commercialization.
Active
pharma
ingredients:
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7. Compared to industry peers: NPM is higher than that if the peers at 14% and its OPM is at
30%. 5 years of sales growth is at a high of 25%
Increases in production capacity and sales volume: Company is planning on expanding.
During this year the company has installed an enhanced capacity of Metformin from 3,000
TPA to 4,000 TPA with a CAPEX of ₹2.71 The Company successfully set up its unit V to
manufacture Clopidogrel Bisulphate & Fenofibrate with a capacity of 180 MT per annum with
a CAPEX of ₹19.26 crore. The Company has also enhanced existing manufacturing facilities
of Ibuprofen from 10,000 TPA to 12,000 TPA and Iso Butyl Benzene from 9,000 TPA to 12,000
TPA in May 2019 with a CAPEX of ₹12.10 crore. All CAPEX was funded through internal
accruals alone.
Converting sales into profits: Increasing sales and increasing the price of Ibuprofen both
led to an increase in profits for the last 2 years.
Employee & Interest Expense: Company has spent 1.1% of its operating revenues towards
interest expenses and 5.13% on employee cost in the year ending Mar 31, 2020.
Business & Industry Analysis
Copyright@2021 www.Futurecaps.com

8. Growing Profit
Margin: IOLCP's current
net profit margins (23.6%) are
higher than last year (19.9%).
The company has shown
significant improvement in
Revenue and Net Profit in
2018 and 2019 due to the
selling price of Ibuprofen
has increased from Rs
660 in Oct-16 to Rs 1170
in Sep-19 an increase of
77%.
The massive increase in the
operating profit margins from
9% in 2016 to 24% in 2019 has
been due to a significant
increase in the selling prices of
its two main products –
Ibuprofen and Ethyl Acetate
which comprise (90%) of the
revenue..
BASF has planned a
mega plant for Ibuprofen
in Germany which is
going to come live in
2022.
POSITIVES
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9. Product
diversification:
Pure Play
The company is
supplying to
different
countries and
has to adhere to
their rules and
regulations like
FDA norms.
NEGATIVES
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10. SUMMARY
20% 19%
SALES
INCREASE
IN 1 YEAR
PROFIT
INCREASE
IN 1 YEAR
As per our research, we
determine the value stock to
trade at P/E of 15+
Currently, the stock is
trading at just 3.7x. Looking
at the trend we are quite
bullish on IOLCP. Investors
can accumulate this share
with keeping a stop loss of
Rs165 for an upper target of
Rs300-375 in next18 to 24
months.
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