Thanks @nityanandparab for the data, much appreciated.
I believe the softening of the price is being reflected in the margins.
1 Like
Looking at the chart of Ibuprofen prices, when we take average it seems prices softened by merely 1% vs. Q4 2019
Though topline increased to INR 492 crores in Q1 2020 vs. INR 422 crores in Q4 2019, Gross profit declined to INR 211 crores vs INR 214 crores respectively (Gross margin for Q1 2020 went down to 43% vs 51% in Q4 2019)
Can this huge fall in Gross margin be due to new products? having less margin?
What can we expect going forward
Disc: not invested
The fact that company is doing pre-payments on the already scheduled pre payments reflects to me that the profits are very real. The cash flow is present, and debt at this rate will be gone.
Is Ibuprofen prices the only reason that it has not got its price from Mr. Market? It looks like market doesn’t want to have another HEG like scenario. The fact that this cash generating, quick debt repayment company is valued at 3 P/E is insane to me.
Disclosure: I am not invested but extremely interested.
I think market is not sure what could be the normalised profit post BASF and other players come in the market with expanded capcaity of Ibuprofen (Already announced)
I think currently Ibuprofen constitutes c.60% for the company topline, so there can be a huge downside in normalised profit, hence current PE of 3x is not the actual representation!!
5 Likes
Well , My common sense says, IOL has a backward integration plant for Ibuprofen, one and only in the world. The demand is not going to go down in the world for Ibuprofen and hence Basf is going to start a plant in Germany by 2022. Even in the current scenario , even after the Texas Plant of Basf has started production and increased capacity of IOL for Ibuprofen , there is shortage in supply.
The IBB price is not going to come down which is a major raw material in manf Ibuprofen. I don’t see Ibuprofen prices going down atall in next 4-5 yrs. And even after that as well as this drug is OTC and pain relieving drug which can be bought from anywhere without prescription ( which is a hassle in Western Countries).So the demand is going to remain robust.5-10% up or down is no big deal that can be part of Biz. But where IOL wins is the backward integration plant as there will be no effect on increase in raw materials price escalation. Moreover, I think they are increasing the capacity for IBB and new API’s and intermediates and new drugs are all in the pipeline and commercialized. Only thing I want to say here is, RISK should be taken, if no risk then just buy A gr stock, Buy Nestle, Proctor and Gamble, Gillette and one is safe…no worries atall.
3 Likes
Hi, Do we have any data related to global demand and supply of Ibuprofen as of Mar 2019 or Jun 2019?
Hi
I am not sure of the supply demand in this period. But currently there is a global shortage of ibuprofen in end markets as per news.
Rgds
1 Like
There no valid clarification on related party transaction (Towel enterprises!) and company has not paid any dividend till date inspite of giving spectacular results and having rosy outlook. Can someone join the dots?
1 Like
From recent Annual report FY2018-19 -
-
Page 5 - There is a resolution with Vivachem Intermediates Private Limited for entering in related party transactions for giving advance of 20 crore against purchase of raw material and sale/purchase of goods with Vivachem Intermediates Private Limited, a related party within the meaning of Section 2(76) of the Act, upto maximum aggregate value of ` 500 crore during the financial year 2019-20 at arm’s length basis and in the ordinary course of business.
-
Page 9 - “The value of proposed aggregate transactions with Vivachem is likely to exceed the said threshold limit, and is expected to be around ` 500 crore
during the financial year 2019-20. Accordingly, transaction(s) entered into with Vivachem comes within the meaning of related party transaction(s)
in terms of provisions of the Act, applicable Rules framed thereunder read with the SEBI Listing Regulations.
Hence, approval of the shareholders is being sought for the said related party transaction(s) entered / proposed to be entered into by your Company
with Vivachem in the financial year 2019-20.”
As per Zumbacorp
Date of incorporation : 12 March 2018
|Authorised Capital|₹50,000,000|
|Paid up capital|₹28,100,000|
Why independent company should be setup for purchasing raw material, if at all it is required then it should be subsidiary isn’t it?
2 Likes
I have raised a red flag and seeking clarification, clearly a conflict of interest and manipulation.May be time to exit.
Disc-Invested 10% of my PF
Two Point Discuss With IOL Chemical Result :
(1) Towel Enterprise Only Sell Towel Export. (Not Manufacturer) So Relative Party Transaction In Which Material Purchase 40cr. from towel Enterprise.
(2) Company Have Good cash Flow so why issue Warrant and use for Repayment of Debt.
Please Give Feedback Upper Points.
1 Like
i have sent email to investor relation of IOLCP for related party transaction almost month ago. Till now no reply. Is there anyway we can escalate it.
2 Likes
Try looking for email of BSE/NSE and Sebi. Send reminder to IOL keeping them in cc
I think this might help!!!
1 Like
Spoke to NSE helpline. I forwarded them my email to IOLCP. They said they will take it forward.
2 Likes
Kindly keep us updated
There are the questions i have asked. Please add if anyone has any other question. I will add them as well if IOLCP reply to my queries.
-
what was the need to make order of 119 Crore to Towel Enterprises
-
Please clarify and name item specifically if the item was not bath/daily use Towel
-
If IOLCP has continuous requirement of this than how in the past it was dealt.
-
How IOLCP is going to utilize these Towels
What is the need of acquiring raw materials from Vivachem Internediates pvt limited (related party of Vijay Garg, MD) from Q1 2020 onwards?
1 Like
Sir, we called up the company and asked about the items purchased from Towel Enterprises, they said that apart from towels the company also manufactures chemicals. IOL purchased chemicals from Towels ltd.
1 Like