IOL Chemicals hits fresh 52-week low, stock down 50% from life-time high

For H1FY22, the company's profit after tax declined 62 per cent year on year to Rs 97.80, due to higher operational cost.

Shares of IOL Chemicals & Pharmaceuticals (IOLCP) hit a fresh 52-week low of Rs 445.50 on the BSE in Tuesday’s intra-day trade in an otherwise range-bound market on growth concerns.

In the past one month, the stock has slipped 20 per cent, as compared to nearly 3 per cent decline in the S&P BSE Sensex. In the last one year, the stock has tanked 43 per cent, as against 31 per cent rally in the benchmark index. The stock has more-than-halved from its record high level of Rs 898 touched on August 25, 2020.

IOLCP is one of the leading and significant player in active pharmaceutical ingredient (API) player and specialty chemicals markets. The company is a manufacturer and global supplier of APIs such as Ibuprofen, Metformin, Clopidogrel, Lamotrigine, Pantoprazole and Fenofibrate and other APIs and has significant presence across major therapeutic categories. IOLCP is the largest producer of Ibuprofen with around 35 per cent global share and the only company worldwide being backward integrated for all intermediates and key starting material of Ibuprofen.

Specialty Industrial Chemicals segment of the company includes manufacturing of Ethyl Acetate, Iso Butyl Benzene (IBB), Mono Chloro Acetic Acid (MCA) and Acetyl Chloride.

For the first half, April to September of the financial year 2021-22 (H1FY22), the company’s profit after tax (PAT) declined 62 per cent year on year (YoY) to Rs 97.80, due to higher operational cost. It had posted PAT of Rs 445 crore for the entire FY21.

The company’s revenues during the period grew 6 per cent YoY at Rs 1,056 crore. Earnings before interest, taxes, depreciation, and amortization (ebitda) margin contracted 1730 basis point to 15.9 per cent in H1FY22 from 33.2 per cent in H1FY21.

While announcing Q2 results on November 12, the management said the company's performance has been muted presently due to contraction in flagship API demand and volatility in raw material prices of chemical products. However, the revenue from new products in pharma API has been getting positive response, the management had said.