Thread by @ketanmba03

IOL Chemical CMP 255
✍️ Ibuprofen price increased from $15 to $18. Management expects it to touch $20
✍️ Recently, Dept. of pharmaceuticals has clarified that no ban has been proposed on export of APIs & formulations in the wake of coronavirus outbreak

https://twitter.com/ketanmba03/status/1091250654083981312?s=20

✍️ IOLCP is having 30% World Mkt Share of Ibuprofen
✍️ 1 Ibuprofen manufacturer which has 15% world Mkt Share is in Hubei province & it is in complete shutdown due to coronavirus outbreak
✍️ Ibuprofen demand increased due to Supply Constraint
✍️ Co. is having 6 months Inventory

✍️ IOLCP is a leader in India for #Ibuprofen.
✍️ Two cos in India which manufacture Ibuprofen (#IOLCP & #Solara)
✍️ Co is not increasing Ibuprofen prices in Indian Mkt
✍️ Co has already started getting Ibuprofen orders at $18
✍️ Currently Ibuprofen capacity utilization is 80%

✍️ Ibuprofen capacity IOL (12k MTPA)
✍️ Mgt expects 100% capacity utilization in next 2-3 months
✍️ Currently it produces 0.8k MT pm. Mgt expects 1k MT pm in next 2-3 months
✍️ Co is fully geared up to cater increase Export Demand in Latin America, Europe & other Asian countries)

✍️ Ibuprofen export sales is ~45%
✍️ With this increase Capacity utilization, Mgt expects Ibuprofen export sales would be ~55%
✍️ Current Debt is ~60 Crs. Mgt expects to be debt free by Q1 FY21
✍️ Co plants 100 Crs CapEx every year for developing new products
#IOLChemical
#IOLCP

✍️ Spent 70-80 Crs CapEx till date & expect to spend another ~20 Crs in Feb-Mar
✍️ With this 100 Crs CapEx, 3 new products(Clopidogrel, Fenofibrate & Metformin) will come up with full fledged capacity by Q4 FY20
✍️ New product development will reduce dependency on single product

✍️ Less Interest cost due to debt repayment lead to increase bottomline
✍️ INR depreciation will also lead to improve profit as Ibuprofen Export vol will increase frm 45% to 55%
✍️ Co may consider dividend once it gets debt free by Q1 FY21. This helps to regain shareholders faith

✍️ Mgt expect to achieve sales of ~2100 Crs in FY20
✍️ 9 months T sales is ~1450 Crs which means Q4 sales wud be ~650 Crs
✍️ Considering 20% increase in Ibuprofen price & increase in export vol, Q4 EPS wud be 20+
✍️ Full yr EPS would be b/w 67-70
✍️ Currently trading at 3.8 PE

✍️ There are lot of analysis done in last few months on IOL 3PE, single product company etc.
✍️ Mgt delivers consistent growth in last 5 Qtrs
✍️ Looks good on chart as well
✍️ Generating healthy free cash flow

@npal20 @AnyBodyCanFly @Harrshit1 @VRtrendfollower @FI_InvestIndia