Shares of this smallcap company surged around 6 percent in Tuesday’s trading session after receiving approval from China’s drug regulator to export the cholesterol drug fenofibrate.
Price Movemnet:
With a market capitalization of Rs. 2,528 crores, the shares of IOL Chemicals & Pharmaceuticals Ltd started Tuesday’s trading session on a higher note at Rs. 444 compared to its previous close of Rs. 409.40. During the trading session, the shares hit a high of Rs. 448.90, gaining around 6 percent and are currently trading at Rs. 431.45 apiece.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced that China’s Drug Regulatory Authority viz National Medical Products Administration (NMPA), China has approved the product “Fenofibrate”.
This will enable the company to export its Fenofibrate API to the Chinese market. Fenofibrate is used to treat high cholesterol and triglyceride levels in the blood.
Financials:
Looking at the company’s financial statements, the revenue decreased by 3 percent from Rs. 520 crores during the December quarter to Rs. 504 crores in the March quarter. In addition, the net profits increased by 22 percent from Rs. 23 crores to Rs. 28 crores during the same timeframe.
Recent Developments:
Earlier, the company’s product “Metformin Hydrochloride” had been approved by the Center for Drug Evaluation (CDE) of the National Medical Products Administration (NMPA), China.
This approval will enable the company to export Metformin Hydrochloride to the Chinese market. Metformin Hydrochloride is an antidiabetic drug that is used to manage high blood sugar levels in diabetes patients.
Future Outlook:
The company expects revenue growth from existing products to reach Rs. 3,000 crore by FY28 or FY29 and aims to expand export markets and increase capacity utilization.
The pharma company has a wide presence across various therapeutic categories like pain management, anti-convulsants, anti-diabetes, anti-cholesterol and anti-platelets.
As per the company’s filing, they hold the leading position in the global Ibuprofen market, boasting a 35 percent share. Their manufacturing capacity stands at 12,000 TPA, supported by a fully integrated production facility.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 8.34 percent and a return on capital employed (RoCE) of 11.74 percent for the period spanning FY23-24. Further, the net profit margin during FY23-24 was at 6.30 percent.
Company Profile:
Headquartered in Ludhiana, IOL Chemicals and Pharmaceuticals was incorporated in 1986. The company is a leading pharmaceutical (APIs) company and is a significant player in the speciality chemicals space. It serves the domestic and export markets.
Written By Vaibhav Patil
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