The credit ratings agency has upgraded the rating of the company's long-term bank facilities to 'CARE A+; Stable' from 'CARE A; Stable'. It has also upgraded the ratings on the company's short-term bank facilities to 'CARE A1+' from 'CARE A1'.

The revision in the ratings assigned to the bank facilities of IOL Chemicals and Pharmaceuticals (IOL) takes into account its improved financial risk profile in FY21 (refers to period from April 01 to March 31) marked by healthy growth in the profitability and improved capital structure.

Further, the revision is also on account its strong liquidity and strengthening of debt service metrics.

The ratings continue to derive comfort from the experience of its promoters and the management team, integrated manufacturing facilities and well-established market position in key product (Ibuprofen) manufactured by the company.

The ratings continue to be tempered by the concentration of its total operating income through limited key products and susceptibility of IOL's operating margin to raw material price/price volatility.

IOL Chemicals & Pharmaceuticals is engaged in the manufacturing of acetic acid with a total capacity of 1,35,068 Metric Tonne Per Annum (MTPA) as on 31 March 2021. The company is involved in manufacturing of chemicals (ethyl acetate, acetyl chloride, iso-butyl benzene etc.) and active pharmaceutical ingredients (ibuprofen, metformin, etc.). As on 31 March 2021, the total installed capacity of ibuprofen is 12,000 MTPA.

The company reported 17% drop in net profit to Rs 75 crore on 4% rise in total revenue from operations to Rs 467 crore in Q4 FY21 over Q4 FY20.

The scrip rose 0.80% to currently trade at Rs 671.90 on the BSE.

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IOL Chemicals & Pharmaceuticals has received upgrade in credit rating from CARE as under:

Long term bank facilities - CARE A+; Stable
Short term bank facilities - CARE A1+

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EBIDTA declined 18% to Rs 117 crore in Q4 FY21 compared with Rs 142 crore in Q4 FY20. Profit before tax in the fourth quarter stood at Rs 106 crore, down 18% from Rs 130 crore in the same period last year.

The company reported 23% rise in net profit to Rs 445 crore on 4% increase in total revenue from operations to Rs 1,991 crore in FY21 over FY20.

Dr Sanjay Chaturvedi, chief executive officer, said: The company completed the installation of new manufacturing facilities Unit VIII to manufacture Ibuprofen derivatives and other pharma (APIs) products.

Dr Chaturvedi further informed that the company has increased the manufacturing capacity of Ethyl Acetate from 87,000 MTPA to 1,00,000 MTPA.

Talking about future projects, he added that the company is in the process of setting up of two new manufacturing facilities 'Unit - IX' for manufacturing Gabapentin & other pharma (APIs) products; and 'Unit - X' for multiple pharma (APIs) products. These units are being installed at the company's existing plant site at Barnala (Punjab) through internal accruals only and the installation of these units are running as per schedule.

IOL Chemicals & Pharmaceuticals is a pharmaceutical (APIs) company. It has wide presence across major therapeutic categories like, pain management, anti-convulsants, antidiabetes, anti- cholesterol and anti-platelets.

The scrip fell 1.99% to end at Rs 700.20 on Friday. In the past one month, the stock has added 17.95% while the benchmark Sensex has gained 7.97% during the same period.

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IOL Chemicals & Pharmaceuticals announced that the Board of Directors of the Company at its meeting held on 4 June 2021, inter alia, have recommended the final dividend of Rs 2 per equity Share (i.e. 20%) , subject to the approval of the shareholders.

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