IOLCP - Synergy in operations made monopoly in product integration

(ukdube) #41

How about debt? How they are going to reduce/manage.Presently debt is more than co M-Cap?Scaring.

(Mehul Shah) #42

That’s why stock is available at this price. The future projection is encouraging and last 2 years growth is impressive. They have capacity expansion plan in near future, however not planning to increase the debt.
So far management has discussed increasing top and bottom line, but never discussed anything on reduction of debt.
I am anticipating some deduction in debt gradually once they start earning net profit in double digit. Re-rating may happen. Next few quarters will be interesting. I would consider this stock as low risk high reward case at this juncture.

Disclosure : Recently taken tracking position.

(sri krishna bhutra) #43

In continuation to my post on BASF hiving off its stake various API businesses and keeping the Ibuprofen business with self.

A recent report of ICICI securities on Strides Shasun demerger lays emphasis on the API demerger being value accretive.

Quoting some test from the same - “The API portfolio of Strides includes several high value products such as generic Sevelamer (Renvela) and is one of the top five companies for supplying Ibuprofen API in US.”

Link to report -

(Sarabjeet Singh) #45

IOL firing on all cylinders , all segments performed resulting in excellent numbers

(Sarabjeet Singh) #48

Expect to repay debt of Rs 26 crore, says IOL Chemicals

([email protected]) #49

I was going through the Q4 presentation of Granules and found that even they make Ibuprofen and Metformin.
Wanted to understand from fellow members if that would have a dent on IOLCP as they are majorly into Ibuprofen and started or about to start Metformin
Any thoughts?

(Mittal.amit0509) #50

The management clearly mentioned that there will be incremental debt reduction. There is a huge consumer market lying ahead for IOLCP which they are planning to exploit. Even 5 % expansion in the US customer base would do wonders as the price rise has been substantially more there. A wonderful recent result history and the confidence of management to even surpass that and give a steeper growth graph makes it a total turn around story.

Disclaimer: I am invested in this scrip and my views can be biased. My projected target price is around 165-175 and that’s a near 100% increase , thanks to the beating it got in recent days along with all other mid-small caps

(sumitg04) #51

There is shortage of ibuprofen as BASF has temporarily shut the production… The shutdown of its plant in Texas started in June 3 due to a technical problem and it will take as early as early September to resume the production

(Sarabjeet Singh) #52

Our CNBC is almost late by a month. BASF had declared this almost a month back

If this surge was purely because of this shutdown then it could have come much earlier. This could be a contributing factor but may not be the only one.

(Sarabjeet Singh) #53

Excellent numbers posted by IOL

(Ayush Mittal) #54

(cool_gaurav) #55

Hi Ayush,

IOLCP - capacity utilization at 100 percent for last two quarters and stock price already up 50 percent since July. Incremental topline & bottomline will come from price increase only. Any views…

(Ayush Mittal) #56

Not much idea as company doesn’t disclose quantitative details. I just shared a related news article.

(cool_gaurav) #57

Ok… Thanks!..I feel news already discounted in the share price. lets see how co. perform in Sep. qtr (expecting similar to June qtr).

(sumitg04) #58

The sales/revenue has been going up from previous quarters in the last 2 Q, while the product price in international and domestic markets have increased in the last month or two. So, if the plant was running at 100% capacity, what was causing increase in revenue.

(cool_gaurav) #59

In my view, Product price is on rise for last 3-4 months. Let’s wait for September quarter results…

(sumitg04) #60

And revenue and profits have been going up for three last 3-4 quarters

(Ashwini Damani) #61

In the last 10-12 year company has raised capital so many times. This appears very negative.

At the current market price, it isn’t very cheap also.

Also if you listen to Vinati concall they say that Bayer’s closure is temporary…so this jump in profits of IOL might be temporary and we might be paying so much for a company which hasn’t been good on capital allocation or execution in the past

(Sarabjeet Singh) #62

Guys, I was looking at the AR for 17-18 and found IOL claims to have 30 % global market share in IBB (Iso Butyl Benzene) . And then I went to Vinati which claims to have 65 % global market share.

Are there only these two significant players for IBB which control bulk of world market ?
No other company in any other country contributing much ?

Any specific reason for these company in India dominating market share ?
( IN recent Vinati conf call they were saying major source of RM for Iso Butyle based chemicals is Korea and SIngapore, and still these India based companies control 95 % market for IBB. Vinati has some backward Integration.)

Just FYI, IBB is a major component in Ibuprofen as well.

Another thing I couldnt find out was what is the total capacity of IOL and Vinati for IBB. If we get this number then atleast we can verify the percentages by reverse calculation.

(Sarabjeet Singh) #63

From the COnf call of Vinati when one of the investors asked for IBB cap utilization the response was
“If you consider 25000 then its at 60 %” . I am assuming the management wanted to say total capacity around 25000 TPA.

I found an old link for one of the research report on IOL dated Nov-2017 and it says IBB capacity at 9000 TPA.

If we consider above numbers:

IOL says with 9000 TPA they have 30 % global market share. This means Total world market is at 30,000 TPA.

Vinati says with 25,000 TPA they have 65 % market share. This means total word market is at 38,461 TPA.

There are only two possibilities:

  1. Either IOL increased IBB capacity between Nov-2017 to Mar-2018. We dont have any info from company side on this so possibility is minimal.

  2. One of the company is not stating the facts right. Question is which one :slight_smile: