I am looking into this company for last few quarters. What I found interesting is the jump in Operating Fixed Asset Base over the years (Consolidated) from Rs. 37 Cr. in 2012 to Rs. 268 Cr in 2015. Substantial part is being operational since last year only. Capacity on Intermediate, API and Inorganic Iodine segments have been increased substantially.
What the company does is already well covered in the HDFCSEC report cited in the thread by one member.
It seems, presently the sales and profitability figure don’t capture these ramp up in Capacity and if and when it happens, it would be interesting to watch.
Presently. 58% of sales come from Inorganic Iodine, 24% from API for Veterinary deworming segment and 18% from speciality chemical intermediaries. Sales are primarily to famed pharma companies in India and consequently the payment cycle is stretched. Omkar gradually expanded in export presence, which they feel would improve the receivable cycle going forward. Presently about 25% is exported.
Main Raw Material is Inorganic Iodine which comes from SQM, Chile (single source) but SQM is opening an warehousing facility in India which again, as per company, would reduce burden on working capital.
Other two main ingredients are Selenium And Tartaric Acid which are procured from Europe and China respectively.
They are also setting up an warehousing facility in Europe to be closer to customer and improving payment and delivery cycle.
With some patents of few molecules received and also few are in pipeline, it would be interesting to see how the margin situation improves. Iodine price has stabilized post Japan earthquake (Japan is other source of Iodine), it seems to remain stable for the coming days even though Iodine cost is mostly a passthrough item.
In India, there are two other companies in Iodine space, but possibly they are mainly into Organic Iodine. They are Calibre Chemical and Samrat Pharmachem. There are other companies which compete with different specific product categories of Omkar.
Though the product range of Iodine Derivatives of Omkar is significantly smaller compared to Sigma Aldrich (Revenue.US$ 2.7 billion, Net Income US$ 500 Million; Net Asset US$ 2.1 billion and ROCE 21%), this company has been recently sold to Merck for US$ 17 billion. Let’s see how our home grown, R&D focussed, technology based, niche pharma chemical player handles its new capacity with a “claimed to be better” product mix.
Promoters have issued warrants to themselves at Rs. 150/- and the existing share pledging by promoters are mainly to subscribe to the warrants, as per their last con call with analysts.
If anyone has total market size of Iodine Derivative product ranges, from credible sources may please share.
Disc.: Invested more than a month back