@jyothi heavy snowfall happened weeks ago and common life severely affected for couple of days. Can you please elaborate how they are connected.
Iāve been trying to understand why the stock rallied 20% today. BASF has its Ibuprofen plant in Bishop, Texas. From reports Iāve been reading, the chemical manufacturing plants across Texas have been affected by the storm in three ways:
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Pipes and equipment has been damaged as they havenāt been designed for severe cold weather.
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Supply of intermediates and feedstock has been disrupted, impairing operational reliability.[1]
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There have been widespread power failures, and the cost of power has gone up, with one major power supplier defaulting.[2]
Itās still far too early to understand whether this will have any substantial impact on Ibuprofen prices going forward. BASF had an earnings call on the 26th of Feb, where they were asked about the Texas plants:
First of all, on the outages, as everyone else, we were hit by the freeze, yes, in the U.S. Gulf Coast, a number of plants that are down, a number of sites that are down, some of them back up, some of them in the process of coming back. And this is based on the experience in ā with the freeze in 2018, where it came 4 weeks earlier middle of January; and then 2012, where it was in the first week of February. It will take, based on that experience, about 2 to 3 weeks that the situation there shakes out, that supply chains are stabilized. You know how closely interlinked and intertwined the production network is in the U.S. Gulf Coast. And thatās what weāre currently expecting.[3]
Iām inclined to discount the events in Texas having any significant impact for IOLCP until thereās concrete news on the supply chains.
Furthermore, BASF India was up 11% today. If the hypothesis of IOLCP rising at the cost of BASF is true, surely the market wouldnāt reward the latter. Maybe thereās a deeper structural reason within the sector?
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BASF has a large Ibu manufacturing facility in Bishop Texas. Heavy snow in this area last month with no power. 20 to 25% of IOLCP sales are spot sales and spot prices went to ~ $15, itās more to do with sentiment, +ve sentiment
@Chins I lived in Austin for few years. I have seen the situation first hand. But everything comes back to normal in weeks time. So was very curious to know whatās the link. Thank you for your analysis. Time probably will explain more.
I lived in Austin too, loved it. BASF plant at Bishop was impacted as they were not prepared, about 2 to 3 weeks impact in production. Spot price of Ibuprofen shot up to 15.
BASF is a large organization with multiple products, what is holding for IOLCP need not be true for BASF
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Any news on ibuprofen API price? Link please to check long term price chart.
P.s.
@reacharjunr has this link, but the page says data is not available.
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Vijay Garg, the person who appears on media as a representative and Joint MD of IOLCP has resigned. Not sure how important role was he playing in the organization
intimation - JMD (bseindia.com)
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Surprised to see this announcement when company is having series of capex plans in the coming years. Company has not announced any material reasons for his resignation. Need to watch from here how the new CEO works.
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Possibly apparent reasons ,appointment of Dr Sanjay Chaturvedi as CEO on 16 Mar and may be clearing way for son Vikash Gupta( Ex Dir) of Varinder Gupta MD.
Dr Sanjay Chaturvedi is a professional, from CALTECH, with vast experience-
Edn-IIS,Banglore,Calteh, Wharton ,Ph D from Stony Brook NY
Work at-Rohm & Haas,DOW, Dr Reddy,Aurobindo,Praj and Health and Welness.
I think it augur well for IOL.
Request addl input on subject from veterans
Disc-Invested.
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Hello Everyone,
This is my first post here on this forum. I am very new to this investing world So kindly forgive me if I am wrong in any of my assumptions.
I took interest in IOL and I went through few of their transcript & Annual reports and came to the following conclusion on their installed capacity for different products they produce.
I found the numbers on installed capacity from their latest transcripts & found prices from pharmacompass website. And just tried to come to a conclusion on their possible revenue with available capacity.
Correct me if I am wrong.
Prices can be further discounted too but I just kept them as I found them on website.
Regards,
Vishal
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Hi All,
I was listening to the Q4FY21 conc call, Mr.Garg was missing in the call and there is a new CEO, even during the Q3FY21 call Mr.Garg sounded positive with no sign of he would not be there in the next quarter, does any one who is following IOLCP have any news on what happened.
Few takeaways from the conc call
- They would like to reduce the dependency on IOLCP
- In the coming years the aim is to have a 70:30 mix Pharma, chemical respectively
- Current Non-Ibuprofen revenue is 10% of the overall revenue
- New plants for the additional API should add a meaningful revenue in the years to come
- For a question related to if they have any plans to become a specialty API player my understanding was they are not looking into that space (this is my understanding, I could be wrong)
- The growth on the chemical product - Ethyl Acetate is having a good tailwind and hence it has contributed well, but it should come to normalcy in the upcoming quarters
- BASF coming on board will not dismantle the demand-supply gap and the pricing of the Ibuprofen should be normal in the range of $12-$13
This is what I pretty much gathered from the con calls, members please add, correct as necessary
After going through concall of various Pharma players in the API space , my understanding is valuation to the API player is given based on the product portfolio of the APIās that they manufacture, for a specialty API the valuation are slightly more than a commodity based API like IOLCP, unless they move towards the specialty API the valuation gap will remain. This is my understanding, members with more knowledge please add your valuable comments.
Disclaimer : Invested from lower levels.
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Why their inventories were high this year. It is almost 100 cr more than last year. If we remove inventory of 100 then profit for 2021 is less than 2020.
Checked this company due to high opm but turned off by inventory.
Disc: Not invested
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Hi @Ashusharma For knowledge purpose can u let me know the correlation of the Inventory with profits for 2021 as I can see -17.11 as the change in Inventory in the P/L.
The increase of 100 crore on the Inventory as shown in the cash flow statement as reduced the CFO by the same amount for this year as well.
Hi,
Companies produce goods which they keep as inventories but not as sales. What they sell, it is marked as sales and deducted from inventories. Sometimes as accounting gimmick companies mark inventories as sales and inflate their profit and results look good. Sometimes also can increase trade receivables and inflate.profit.
Please remember inventory and trade receivables are normal part of business. When they jump substantially high then a red flag is raised.
Disc: This is my limited understanding and I am not an expert here.
Previous year there was no such accounting gimmick. So i had to.ask in forum if any valid explanation can be given.
Thank you
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Hi Ashu,
Thatās not how you read financials. Higher closing stock means higher purchases, so you need to reduce both purchases and closing stock to get the profit figure.
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