Stock split: Pharma stock jumps 7% after board to consider share division

During Thursday’s trading session, the shares of one of the leading manufacturers of pharmaceutical APIs and a significant player in the field of speciality chemicals surged 7.5 percent, reaching Rs. 436.5 on BSE, after the company announced scheduling a Board meeting to consider stock split. 

With a market cap of Rs. 2,505.5 crores, at 11:03 a.m., the shares of IOL Chemicals & Pharmaceuticals Limited were trading in the green at Rs. 426.6, up by nearly 5.1 percent, as against its previous closing price of Rs. 405.95. 

What’s the News: 

IOL Chemicals & Pharmaceuticals Limited (IOLCP), as per the latest regulatory filings with the stock exchanges, announced scheduling a Board meeting to consider the stock split proposal. 

The meeting is scheduled to be held on Friday, 27th December 2024. During this session, the Board of Directors will consider and approve the alteration in the share capital of the company by sub-division/split of existing equity shares having a face value of Rs. 10 each, fully paid up, subject to their decision. 

Financials: 

IOL Chemicals & Pharma reported a marginal decline in revenue from operations, experiencing a year-on-year decrease of nearly 3.6 percent, falling from Rs. 545.3 crores in Q2 FY24 to Rs. 525.8 crores in Q2 FY25. 

Similarly, the company’s net profit decreased from Rs. 37.8 crores to Rs. 19 crores over the same period, representing a decline of around 50 percent YoY. 

EBITDA for Q2 FY25 decreased by about 33 percent YoY to Rs. 48 crores, down from Rs. 71.2 crores in Q2 FY24, with the EBITDA margin falling by 390 bps, from 13 percent to 9 percent. 

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Company Growth: 

Improved asset utilization: The company’s turnover increased to Rs. 2,133 crores in FY24 from Rs. 983 crores in FY18 at a CAGR of 13.77 percent. 

Focus on Regulated Markets: The share of regulated market sales has increased to Rs. 300 crore in FY24 from Rs. 100 crore in FY18. 

Expanding Non-Ibuprofen Business: Increased contribution of non-Ibuprofen drugs from Rs. 35 crore in FY18 to Rs. 431 crore in FY24, showing a steady upward trend over the years.

Capacity expansion in Pharma & Chemicals: Added more than 10 products since 2017 in APIs and chemical segments. IOLCP has recently commenced a new plant of Acetic Anhydride. 

Stock Performance: 

The stock has delivered negative returns of nearly 7.7 percent of returns in one year, while around 5.5 percent of positive returns in the last six months. So far in 2024, the shares of IOL Chemicals & Pharma have given negative returns of about 10 percent. 

About the Company: 

Incorporated in 1986, IOL Chemicals & Pharmaceuticals Limited is engaged in the business of manufacturing and selling of Pharmaceutical and Chemical products, serving both domestic and international markets. 

IOLCP is the largest producer of Ibuprofen with ~30% global share and the only company worldwide to have full backward integration for all intermediate stages of Ibuprofen production, with a capacity of over 12,000 MT. Additionally, the company is among the major producers of Metformin in India. 

The company began manufacturing Ethyl Acetate in 1996 with an initial capacity of 3,000 TPA. Over the years, it has significantly expanded this segment, emerging as a major producer of Ethyl Acetate with a current production capacity of 1 lakh TPA. 

Written by Shivani Singh 

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