IVP is an old company, earlier known as Indian Vegetable Products Ltd. Today the business is mainly into foundry chemicals and polyurethane products. Over the last few years, PU systems for footwear have become a much bigger part of the company, and they are also trying to grow flexible packaging adhesives and other non-foam PU applications.
What caught my attention is the recent change in profitability.
For many years IVP was mostly a 5–7% margin kind of business. In Q4 FY26 margin improved to around 9%, and in Q1 FY27 it went up sharply to around 14%. PAT also increased much faster than sales.
I am not assuming that 14% margin will continue. It could partly be due to better raw-material procurement or temporary factors. But if margins settle even around 9–10% instead of going back to 5–6%, the earnings profile of the company can change quite a lot.
Another positive is that debt has come down substantially over the last few years. The Mumbai Port rent dispute, which was a large overhang, also seems to have moved favourably for the company.
The area I am still not comfortable with is receivables. They are quite high, and there was also an employee-related issue involving customer records in the past. So cash conversion and debtor quality need to be watched carefully.
My basic thesis is that IVP may be moving from being mainly a low-margin foundry chemical company to a more diversified PU/speciality adhesive company.
For me, Q4 FY26 was the first signal and Q1 FY27 was the next confirmation. Q2 and Q3 FY27 should tell us whether the margin improvement is structural or temporary.
I am invested with a small position and still studying the company.
Would be interested to hear views from members who have followed IVP earlier, especially regarding the sustainability of margins, competitive position in PU/flexible packaging adhesives and the quality of receivables.
Disclosure: Invested. Not a recommendation.
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