Mehabe score: 6 G Factor: 4 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 7.
Description
IOL Chemicals & Pharmaceuticals is engaged in the manufacturing and selling of APIs / bulk drugs and specialty chemicals. The company caters to both domestic and international market.
Main Points
Business Leadership #
Largest manufacturer of Ibuprofen with 35% Global share.
Only company world wide being backward integrated for Ibuprofen.
Largest producer of Ethyl Acetate at Single Location in India.
2nd Largest producer of Iso Butyl Benzene (IBB) with 30% Global share.
Zero Discharge Effluent Treatment Plant.Site:IOLCP
Market Cap:
Rs 3,867 cr
Price:
659.0
Trading pe:
8.41x
Book-value:
215/share
Div yield:
0.61 %
Earning yield:
17.19%
Face-value:
10.0/share
52week high:
898.90
52week low:
304.00
Technical Analysis
Stock trades at 659.0, above its 50dma 640.25. It also trades above its 200dma 625.11. The stock remains bullish on techicals
The 52 week high is at 898.90 and the 52week low is at 304.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 49.30% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 53.19%
-‘s median sales growth is 17.03% of last 10 years
Weakness
–
Competition
– The industry trades at a mean P/E of 28.7x. Biocon trades at the industry’s max P/E of 68.05x. IOLCP trades at a P/E of 8.41x
– Industry’s mean G-Factor is 2.8 while the mean Piotski score is 8.0. IOLCP has a G-Factor of 4 and Piotski scoreof 7.
– Average 1 month return for industry is 4.8%. The max 1- month return was given by Piramal Enterp.: a return of 29.57 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 460.0 cr compared to Rs 441.0 cr for period ended Mar 2020, a rise of 4.3%
Operating Profits reported at Rs 111.0 cr for period ended Mar 2021 vis-vis 137.0 for period ended Mar 2020 .
Operating Margins contracted -693.5 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 12.82 compared to Rs 19.56 for previous quarter ended Dec 2020 and Rs 15.87 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1967.0 cr for period ended TTM vis-vis sales of Rs 1894.0 cr for the period ended Mar 2020, a growth of 3.7%. The 3 year sales cagr stood at 26.0%.
Net Profit reported at Rs 445.0 cr for period ended TTM vis-vis sales of Rs 361.0 cr for the period ended Mar 2020, rising 18.9%.
Company recorded a healthy Net Profit CAGR of 151.4% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 471.0 cr for period ended Mar 2020 vis-vis Rs 273.0 cr for period ended Mar 2019
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 57.0% compared to 53.0% over the last 3 Years. – The stock has given a return of 61% on a 1 Year basis vis-vis a return of 96% over the last 3 Years. – The compounded sales growth on a TTM bassis is 4% vis-vis a compounded sales growth of 39% over the last 3 Years. – The compounded profit growth on a TTM basis is 23% vis-vis a compounded profit growth of 323% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 5.96% vis-vis 7.77% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 50.29% vis-vis 48.48% for Dec 2020
Conclusion
– has reduced debt.
– is almost debt free.
– has delivered good profit growth of 49.30% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 53.19%
-‘s median sales growth is 17.03% of last 10 years –
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 640.25 and is trading at 659.0, thus bullish price action wise.
