IOL chemical & pharmaceutical- Longterm Wealth Creator & Multibagger

Had recommended this stock on 6th April’20 @ 193.post recommendation stock had great run up of almost 110% that too in just 45 days when NIFTY corrected from highs of 9850 to 8800 and Recently hit all time high of 409.

Link dated 6th April👇👇👇

https://wealthcreatures.com/2020/04/06/pharma-pack-safe-bet-in-current-environment/

We have tried to give our Detail Report on Stock.

RECO RATE – 193

RETURNS TILL DATE – 110%

EXPECTED FUTURE RATE – 600/750/1000+

IOL Chemicals and Pharmaceuticals Limited (IOLCP) is a leading organic chemicals manufacturer and supplier. IOLCP is Indian manufacturer of industrial chemicals & bulk Drugs for over two decades. By pursuing & implementing the highest standards of excellence in operations, they have nurtured capabilities. By delivering consistent results have earned the admiration of customers and stakeholders alike.

IOLCP which started in organic chemical space and steered itself towards generic pharmaceuticals. Currently IOLCP operates under two verticals Speciality Chemicals and Active Pharma Ingredients. Below are the list of chemical produced by IOLCP. IOLCP speciality chemicals find wide use in printing, paints, plastics, automobile coatings and textiles. Some of its speciality chemicals like Iso Butyl Benzene acts as raw material for Ibuprofen.

ACTIVE PHARMACEUTICAL BUSSINESS (API) :

  • Ibuprofen (Pain Managementj)
  • Metformin Hydrochloride (Anti Diabetic)
  • Lamotrigine Fenofibrate (Anti Convulsant)
  • Clopidogrel Bi Sulphate (Anti Platelet)

SPECIALITY CHEMICALS :

  • Ethyl Acetate (Solvents) : Used as solvent for high resolution printing inks, lamination adhesives and flexible packaging.
  • Iso Butyl Benzene (Petrochemicals): Used for in house use and direct sale. Key component of Ibuprofen.
  • Acetyl Chloride (Chlorinated Compounds): Is used for manufacturing of Ibuprofen as part of backward integration
  • Mono Chloro Acetic Acid (Chlorinated Compounds): Is used for manufacturing of Ibuprofen as part of backward integration

Apart from the above, IOLCP has commercialised 6 APIs and nearly 6 APIs are indeed pipeline.

IOL chemical accounts 1/3 of the world’s total production of Ibuprofen.Companies 90% Revenue are generated from Ibuprofen.Prices of Ibuprofen are on rise have increased from 11$ in 2017 To 18$ in 2020 and are expected to rise for next 2 years as huge in demand.

Company has Longterm contract with many leading companies like Cipla, Abbott,Dr.Reddy

COMPANY CLIENTS :

IOLCP customers are spread across 50 countries including Brazil, China, Hungary, Russia etc.

The company has clients who cater to pharmaceuticals to paints industry. Pharma players like  Strides and Granules import raw material from IOLCP for Iburofen manufacturing.

Some of other names apart from the below listed clientele is BASF, Sun Pharma, Dr Reddys,  Uflex, ITC, DIC, Nectar Life, Sinochem Pharma, ICI Paints, Avon Organics, Asian Paints, Hindustan Polyamide etc.


Compounded sales are Growing at decent rate.Last 3 years profit are growing at 99.36% and 5 years profits are growing @135% and even 10 years profit are growing@33.98%.
ROE and ROCE 69% and 55% which is tremendous.

FY20 expected EPS can be around 65 to 68 and FY21 Expected EPS can be 75+.

We value stock to trade at P/E of 15+ which can take stock to 600/750/1000+ Which can be achived in next 24 to 36 months.

Disclaimer : The authors might or may have positions in the stocks mentioned, please assume our bias exists. This is not a recommendation to buy or sell securities. This is purely information about the company mentioned.All views expressed are personal and only for Educational and study purpose. Consult your financial advisor before investing or taking any position based on above article.

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