IOLCP - Synergy in operations made monopoly in product integration

Stock Opportunities Untested - but worth a good look
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Q3FY23 Concall

Pharma

  1. Ibuprofen capacity utilization is 80% and is expected to improve further to 95% which might take couple of quarters.
  2. Demand for Ibuprofen is picking up. Guidance for Ibuprofen to touch 500cr in FY23.
  3. Non-Ibuprofen business has already delivered in nine months what it did in full last year.
  4. Real growth will come from non-Ibuprofen. In next coming quarters, non-Ibuprofen segment will become profitable.
  5. Exports vs Domestic (Overall): 27% and 73%
  6. Exports vs Domestic (API): 30-35% and 65-70% (most of these exports are in emerging markets). Goal is to improve revenue share in regulated markets
  7. Prices of products have gone down (ethyl acetate the prices dropped by more than 30%. On paracetamol, the prices have dropped again by similar numbers 30%. In metformin, the prices have dropped about 20%-25%). But the volumes have gone up.
  8. EBITDA margins (Q4FY22 vs Q1FY23 vs Q2FY23 vs Q3FY23): 9%, 11%, 6.7%, 9.4%
  9. In terms of audits, all the facilities in Europe are approved. However, facilities in US are not approved yet, USFDA is yet to visit the facilities.
  10. During the quarter, the company was also granted a patent for an improved safe process for preparation of Sartan drugs or formula eye by Indian Patent Office that includes Valsartan, Losartan, Irebesartan, Olmesartan, Candesartan and other Sartan drugs, which is a class of medicine known as angiotensin tube septer blockers, which is used to treat high blood pressure and heart failure.
  11. The company is building capacities for molecules such as Paracetamol, Metformin, Clopidogrel and Fenofibrate and this will overall reduce the dependence on ibuprofen.

Chemical

  1. Demand is stable. No volatility in demand
  2. Currently at a situation where acetic acid prices are holding stable around ₹40 a KG and ethyl acetate prices are stable at ₹83-₹84 a KG level today and this gives us comfort that the quality of the business and the profitability will improve.
  3. Plant was shut for maintenance due to which chemical business was flat/low.
  4. The specialty chemical segment the raw material prices for certain products have stabilized, but some are yet to stabilize.
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512

Any views on management change? New CEO seems very experienced. Ashish Kacholia sir’s name is not there in latest shareholding but promotor has increased the stake.

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New CEO also comes in with a lot of experience having worked in Ranbaxy, GVK Biosciences, Alembic Pharmaceuticals, Sun Pharma, and Apollo Hospitals in past. Need to observe for couple of more quarters.
Secondly, I don’t think we should analyze a business on who is in the latest shareholding. It’s your conviction on the business.

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Promoters did not increase stake. Its just amalgamation of an entity which was previously in public category.

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Presentation at B&K Securities ‘Trinity India’ Conference.

India’s second largest manufacturer for Iso Butyl Benzene (IBB) with ~30% global
share.

Asia’s first continuous dual technology (green chemistry) plant for MCA and Acetyl
Chloride

Target non- Ibuprofen business to contribute 50% to total pharma business

Capacity expansion for Chemicals & Pharmaceuticals underway

Among the largest producer of Metformin in India

Received approval from Korean FDA for 2 products and 6 products from Russian regulatory Authorities.

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link is not working, can you please post a fresh link

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IOL Chemicals and Pharmaceuticals - 1QFY24 Result Update - 17 Aug 23.pdf (444.6 KB)

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Did the management or the company gave any further updates on their investment in USPharma Ltd? There was no mention of it in the MDA commentary of AR of FY 23 and same was the case for all the investor earnings call since Sep 22 quarter to Sep 23 quarter.