IOLCP Business Analysis: Commodity or Cheap? 🤔

[@puneethram6487]

Haven't found any other channels providing such detailed analysis ❤️❤️❤️ Your understanding of the chemical industry is a level ahead of everyone else 🔥🔥🔥

[@SOICfinance]

Hi Puneeth!😁 Thanks for watching our video. We appreciate your feedback and support. 🙏 We’re glad our content was informative and interesting for you. 💯 Thanks for your kind words of encouragement! 🙌🔥 I'll pass on your compliment to our team. 😁 We hope you continue to learn along with us! 👍

[@seekingwisdom2]

Nobody provides this much high quality research for free. Hats off to you bro. Keep it up.👍

[@raksaninvestors4908]

Hi Ishmohit!! Thanks for the wonderful video! And also for quoting my question from the call! Wanted to add a few things and also if we could touch base for the same! 1. Mr Vijay Garg resigned in Q4 and a new CEO joined in March. The timing feels odd, right when the dream run of inflated Ibu prices was ending, taking out a lot of the revenues and profits (margins). 2. As per a back of the envelope analysis (forum.valuepickr.com/t/iolcp-synergy-in-operations-made-monopoly-in-product-integration/11412/458?u=keshavkumar), the share of other molecules has been ramping up nicely but at the expense of Ibu due to margin erosion in the latter. In Q4, the EBITDA margins have come down to 30% from 40% in Q3 and earlier. So this signals a sharp Ibu correction and a significant reliance hereon on other molecules. So, assuming they did a similar run rate as last Q for the newer molecules, Ibu revenues in Q4 could have been in the range of ~120-150Cr (annualised ~480-600Cr for FY22). 3. At least for the low base effect, they have been successfully able to ramp up newer molecules with decent capacity utilisations. There is a lack of clarity as per the exact capacities in pilot, commissioned and in direct pipeline with specific timelines. So it is hard to make a guess. Assuming their guidance of 20-25% PAT, we can take 30% EBIDTA as the baseline and this could be a sustainable figure due to a good absolute market size of these molecules and lesser reliance on KSM imports. (Like they said they would be producing UDCA with no external dependencies on imports). 4. Now, coming back to the analysis. My observation is, if their revenue growth guidance is to be believed (or even Capex; and then we can reverse engineer Asset Turns.. for which the guidance stands about in similar range if we take about 2x Asset Turns), they would take a year to come back to the earlier bottom line and grow thereon at about 15% on the bottom line. So a year of tepid growth due to revenue erosion in Ibu, but a catch up hence because of other contributors. Mind you but, these are all subject to implementation and acceptance without any major observations. They have had a decent history of FDA clearances, so in due time we could expect more regulated market contribution. 5. Coming back to the Price an Cash Flows, the FCF generation should be good in the medium term (right now, it’s almost at par with Profits) till the time they enter more in regulated and if they are able to. Then, the working capital cycle could elongate. So, on a pure cash flow basis for the next one year, the FY22 discounted PE (discounted to current date assuming 0% Discount Rate), should be close to ~10. And thereon, it should get on the growth trajectory. A case in point for "a good company at a fair price". So a turbulent one year for sure. But hopes are there thereon. (All this provided implementation is successful) 6. My only point of concern (apart from any corporate governance issues that there might be and I haven’t covered over here) is the communication clarity of the management in regards with the capacity structure and timeline for different molecules. If we have more clarity on that, we can make better estimates. Hoping they do a call this Q with a new CEO at the helm and we get more clarity. Note: this is not an advise to make a judgement whether to buy or sell but just to put my observations in front of you. Regards, Keshav Kumar

[@ArijitMukhopadhyay]

I have seen so many videos who recommend this based on low PE (compared to Industry) without understanding the reasons!! You are a rare gem who links valuation with the story & reason and help retail investors to better utilize their money!! Qualitative Analysis is way more important & KUDOS to you for such hard work & research 👏👏

[@SOICfinance]

Thank you so much for your kind words & Glad you liked it :) Hope to keep adding value in your investing journey.

[@SUMIT-ej4kh]

SOIC is the best KZbin channel for discussion on indian chemical stocks.lots of hardwork.

[@bezamanoj4761]

As of now single reason for low valuation is that Company is dependent on Single Product.As BASF Plans to revive the Plant,the ibuprofen supply will be more than the demand. Even if company diversifies its product portfolio,then its valuation will shrunk because as of the NPM is in the range of 25-30% and new API pipeline of products is actually a Generic drugs.The specilaaity is that more than Volume,more the realizations.But if they can keep NPM in the range of 25-30 after generic drug is a important question?? As company enters into new product,it needs to compromise the prices pressure which affects its margins. One positive thing they more of Green Solvent which in future replaces Petro chemicals.More Supply of Ibuprofen than demand can effect t its pricing realization. As of now,it is a Single product driven Company.

[@vaibhavdos]

cant rely on single product at this point of time. Pharma market are monsters.

[@tradehut2782]

Agreed. IOL is too generic

[@SOICfinance]

Yup!

[@rammahesh3349]

Oleochemical makes sense only for high volume high margin products they can't be use for commodity chemical industry. Palm oil price are volatile. The price hike can be transferred to customer not for industry.

[@subhamdeb2554]

@@SOICfinance ishmohit plz arrange a webiner on indian pharma sector and future of companies like abbott, novartis, sanofi.... Etc...

[@rpyadav513]

Very good research and analysis done by you. We appreciate your work

[@jiteshmehta902]

You are really a champion in analysing pharma and chemical sector

[@tslathi]

Super analysis... Really worked very hard

[@NKG8291]

Ishmohit - needed to understand GRANULES on similar lines - commoditised API but pricing power helps them grow sustainably in formulations and they are slowly moving up the value chain with mups etc to get an operating profit margin of 20% +.. their strategy to have high volume generic formulations with backward integration, launching new high end generics in the US with constant renewal to take care of erosion and also slowly building more complex products using their own raw materials. Why is the market not giving this company a high valuation? Their seems to be a structural story here.. what am I missing?

[@sanjaykayathwal4700]

Thanks Professor for enlightening about IOL Chemicals

[@SOICfinance]

😆 Hi Sanjay! Thanks for watching our video! 😁 We appreciate your feedback and support. 🙏 We’re glad our content was comprehensive and engaging for you. 💯 We hope you continue to learn along with us! 😁👍

[@raghulseetharamevents1777]

First person to watch.... most awaited stock analysis

[@ashishpachange317]

Sir,according to me,instead of selecting IOLCP u would have select such business which will create good wealth in future and guide retail investors.Because we eagerly waiting for your video on Sunday,pls make video on such industries which u feel can make good in future and there capex is in progress,good business model, and can creat good wealth in future, like valiant organics or some video like what is happening in stride Pharma,indico remed. etc

[@vishalbhardwaj8846]

Thoroughly explained.... very well made video... 🙏🙏

[@palashagarwal3203]

Brilliant analysis once again :). Thumbs up.

[@sangamlal9082]

Aapke dwara Di gai jankari hamesha hi acchi hoti hi thanks

[@gouthamresnick]

Hello ishmohit, I have a Narrative for for IOLCP Since the company was single products company it would be very difficult to diversify immediately into niche and advanced technology related products, for that either they should do acquisition or go with R&D. What if the company is trying gain client and diversify into commodity chemicals to generate cash for time being then parallely focus on R&D for products with high pricing power?? For this Narrative the management needs to be exceptional in capabilities and honesty, what Is the quality of management???

[@rsk6688]

Great analysis once again 👍👍👍

[@mohammedaffan7326]

Thanks for coming up with different business case studies every week. Keep up the good work. As they say, teach a man how to fish , you feed him for lifetime. One small suggestion to SOIC, can you come up with a video to understand the account language...where you talk abt RPT, notes in financial statement etc.

[@suhailansari4408]

Thank you so much for providing a clear understanding of IOL CP. Your videos are very much clear to us in every sense of their significance.

[@SOICfinance]

thank you😁

[@mahantheshdn940]

Nice presentation Thank u Team SOIC

[@SamsungTab-ir5eg]

can you make a video on Caplin Point

[@jayrijiya9757]

Amazing analysis, every time you're serving us something special. 👏thank you

[@SOICfinance]

My pleasure!

[@jpsharma101]

Excellently analysed dear

[@rkp1167]

Thanks for such a nice explanation. Regards

[@vishwasrokade2208]

As usual Good analysis. Keep it up👍

[@shivubarbare1234]

Kal maine isko portfolio me add karne ka socha our aaj aapka video aya.. Really surprised.. Thanks for the video Ishmohit sir

[@aambybhat]

Fully English video. Thumbs up!!

[@abhishekgulati2503]

Please continue to make your videos in English language only, thanks for such a great analysis.

[@SOICfinance]

Hi !😁 Thanks for watching our video. We’re glad our content was informative and engaging for you. 💯 We'll keep your suggestion in mind. ✅ We hope you continue to learn along with us! 😁👍

[@stocknmaths3676]

The best analysis. Wish u the best.

[@theyoungindianinvestor5638]

Please make some small cases where retail investors without much knowledge in apis, speciality chemicals, pharama invest

[@Starboi_1]

You are the best man 🔥🔥😘❣️❣️ I love your study

[@shauryayadav17]

Sir your analysis on every stock is very deep that I can't stop the video till it got completed. One request for you can you please analyse KPIT tech and Phillips carbon.

[@SOICfinance]

Thank you 😊 & glad you liked it. Hope to keep adding value in your investing journey :) Sure, stay tuned. We will soon cover them

[@superakshit]

Thanks again! If you could provide a value chain wise distribution of the players in the pharma industry (and even chemical peers that overlap), it would be great. With so many names, and a lot of them claiming to be of common verticals like API (to a beginner, IOLCP & Laurus Labs might look like they're in the same boat, unlike someone who's looked at in detail) it gets a bit hazy to tell who's competing with who, supplying to who and is the client of who. Perhaps a video on India's pharmaceutical industry might be great?

[@ishmohit1]

Hi Akshit, have done a very detailed webinar on the same :)

[@babajinighot1222]

Very good analysis. You are always doing something new & different experiments that involves deep knowledge & your skill to represent it in the simple ways.

[@SOICfinance]

Thank you so much 😀

[@mohitbaid8148]

Hey team soic, Please make a case study on MARKSANS pharma and why the valuations have remained stable for so long !

[@KiranK-bi7ek]

Your videos are gold mines for retail investors

[@bullbhaidahorn477]

Can you analyse Indian Bank? Was one of the best managed PSBs before merger with weak Allahabad Bank. Stock price collapsed from 420+ to 40s. Last 4 quarters, Indian Bank seems to have scripted a massive turnaround, with huge profits, bringing net NPAs to 2% levels despite the baggage of Allahabad Bank. Valuation wise, Indian Bank is at a mkt cap 16k crs which is about 50% of even worse banks like Bank of India, BoB and others. Seems a huge case for re-rating. Indian Bank was an FII favourite before the merger with Allahabad Bank and seems well on its way back to 400+ on the monthly charts.

[@shaileshmishra2334]

Wonderful analysis

[@viveksingla7632]

Acc. To me, Hindi + english language is best for everyone🙏

[@Djrahul1000]

Very well explain thank you

[@RRR-gl7oi]

Great insights.. 👍much needed one on iolcp to understand in depth on core business model and it's market share, product diversity etc.. and also on the PRICING POWER.. this type of analysis is essential to get conviction and make meaningful informed decisions 🙏😎

[@SOICfinance]

Glad you liked it

[@ashwath30jul77]

Excellent analysis as usual. Could you please if this recent hype sugar industry justified? Is it in a bubble? I would really appreciate if you can post a video on this. Thanks.

[@canksampat]

When will you cover Natco Pharma?

[@lokendrabhati1808]

I am grateful to the God who Mets me your channel...Outstanding analysis..No one can beat SOIC team...Again thanks wonderful session....😊😊

[@anirbanmanna2897]

This channel will become a 1 million channel very soon. Only high quality content

[@SOICfinance]

Maybe one day!

[@superakshit]

Great analysis. Needed these insights on the company for a crucial capital allocation decision in my portfolio. Whereas I have stakes from a much lower price, I was wondering if I should book some in order to reduce risk. Thanks man!

[@amitdhase]

First time watching your video, This was a great insight. I felt it was worth of time.

[@SOICfinance]

Glad you enjoyed it!

[@harkrishanlal5032]

Brilliant as usual

[@parakhshah2471]

"All compounders are multibaggers but not all multibaggers are compounders" Video summarised in one statement and what a statement!

[@sinhaneeraj01]

Pls share details analysis of Morepen labs

[@vermaamit0077]

Excellent video, as always!

[@SOICfinance]

Thank you! Cheers!

[@silenthunderr5340]

Great Analysis thanks for sharing

[@SOICfinance]

Hi!😁 Thanks for watching our video. We appreciate your feedback and support. 🙏 We’re glad our content was comprehensive and engaging for you. 💯 We hope you continue to learn along with us! 😁👍

[@silenthunderr5340]

@@SOICfinance already intensive course member

[@drprasannasuru]

Paaji , Sat Shri Akaal Plz make video on Nestle India & MNC Pharma companies.

[@sureshkblr]

Finally, I got answers to all my questions about IOL, thank you.

[@SOICfinance]

😁👌👌

[@prateekgoud3648]

What answer

[@adityachourasia7710]

very well explained

[@satishkanetkar3684]

Very good insigts of company.

[@gauravjain10]

Thanks for analysis They are trying well to come out of ibuprofen dependency. I think its a long term multibagger and i eill hold on till any detoriaration in fundamentals.

[@ratnasarkar8721]

Please do business analysis of Dr. Lal Pathlabs and Mold-tek Packaging...

[@rajendragandhi9999]

Bhai Sahab namaskar please post analysis on Graphite and Heg. Thanks

[@GauravSingh-pn6gb]

I really look forward for your videos. The way you dissect a business and explain each and every point is commendable Keep up the good work👍

[@shrikantshridharan3626]

Thanks for another wonderful video.

[@karanmohindroo7773]

AGREED. Dependency on ibuprofen which is a generic API is very high. This doesn't gives us confidence regarding the cash flow sustainability

[@DurgvedaRajputboy]

Thanks for video

[@abdullahcsa]

I played the video as soon as I got the notification at 11, but the video has already got 10 views , looks like people are waiting and watching the video as they watch a live sports video

[@rajanchauhan8140]

Thanks a lot for this business analysis 🙏 I am eagerly waiting for this. Big brother 😇🙏

[@SOICfinance]

thanks 😁

[@rajanchauhan8140]

@@SOICfinance thanks to You Big Brother 🙏 You do lots of hardwork to only for teach us. Thanks a lot 😇🙏

[@phanidhulipalla9745]

Thanks for sharing very valuable knowledge. Please make a video regarding the good hotel stock which is coming wealth creator.

[@niladribanerjee2821]

You have lots of knowledge in pharma as I can see in your different videos. Can you tell me is there any video where you explained the basic things of pharma stocks. Like what is generic? What is API? Why big pharma companies are mostly in USA still India is called pharma of world?

[@gosarjayantilal6464]

In which new busines es iol chemical is entering ?

[@vishalmehra6509]

Great clarity! Looks like cousin of Granules as both are into generic API and cheaper valuation. Initial momentum can be good looking at a demand currently but not a long term value bet. Enjoy moments of gain and book profit. Granules is slightly better as the key shareholder is KKR and they know how to increase its valuations, present it to investors and sell the company at a higher rate.

[@SOICfinance]

Thanks for the info!

[@trendtrader8074]

Sir please make review Video of the upcoming ipo

[@aswinkumarramesh2888]

Brother please check provided info. I think current MD is Varinder Gupta. Vijay Garg has resigned.

[@ppashesh]

Thanks Ishmohit for the detailed analysis. The one good thing is they are debt free but as you mentioned about the expansion plan it seems they are not capitalizing this huge opportunity in a radical way. Entering again into commodity race doesn't make sense.

[@SOICfinance]

👌👌

[@arvindjain7295]

thanks for the video. really appreciate your efforts.. any books recommendations on stock market... pls do suggest

[@SOICfinance]

Noted :)

[@vinodthasal1537]

Make video on acrysil india

[@sureshkhandelwal3497]

Thanks for it. Can you a video on syncom pharma, it is having continuously uppers circuit.

[@Ride_with_Remo]

SuperB ...analysis

[@shubhamajmera4709]

Sir please do an analysis on Strides Pharma

[@alokkanojiya1844]

Thank you sir sharing wonderful knowledge 🙏🙏❤️❤️ Sir jee great content cover.

[@rishitiwari182]

So much Relatable in the present scenario IOL CP go in 410rs

[@shash071]

Thanks ishmohit

[@skajaharalam9608]

Sir, please analyse Atul Ltd and Navin fluorine international.

[@srbestcartoonandart5493]

Can you analyse ultra merine pigment

[@kaustavraja3921]

@Ishmohit: would it be possible to make a video on Honeywell automation?

[@AjayChauhan-qb8hr]

Nice presentation...

[@maniselvan121]

Aarti drugs vs iolcp are same business or different....? And which is best for long term...?

[@dr.rajendrajaincorporatorm6609]

Pl suggest should I book around 20% loss in iolcp and shift to which stock ??

[@nasirhaq9017]

Sir please make a complete Analysis video on Dolat investment.

[@CoffeeAndThrottle]

Yes mate totally I want that too

[@CoffeeAndThrottle]

Dolat investment

[@paulocoelho8967]

Dolat investment.

[@stayhappystayhealthy2349]

Plz make a video on Castrol

[@gauravmalhotra6593]

Sir please do analysis of zensar technologies 🙏🙏🙏

[@richdad369]

Sir pls make a analysis video for glenmark life sciences👍

[@SOICfinance]

Sure, Stay tuned :)

[@richdad369]

@@SOICfinance Thanks sir

[@rajavel6123]

You are 100% better than so called Sebi registered analyst bro

[@TheShroffchetan]

In depth analysis. Covered all points very well. My suggestion why you and Sajal Kapoor take Science tutorials (on Chemistry and Biology). Millions of children will benefit. Keep good job. Request you to review of some companies other than Pharma and Chemical like banks, NBFC, FMCG etc. It will be very helpful for understanding business and valuation

[@SOICfinance]

Great suggestion! Happiest Minds up next :)

[@suryapbhoi]

Pls do an in-depth analysis of NGL Fine Chem

[@shaileshshaha8856]

Best information Like you

[@rushilhanda9919]

Can you please do an analysis of Granules

[@rammahesh3349]

SOIC always makes me to learn even in Sunday 😊thank you Mohit sir for your valuable analysis waiting for insurance sector

[@SOICfinance]

😁🤝

[@rashidraza88]

What happened to the CDSL video? I thought after Saregama it will come

[@SOICfinance]

sure😁

[@ashesh242]

Thanks for valuable info

[@dr.shubhamdesale1137]

Can you pls analysis of marksans pharma