Buy IOL Chemicals; target of Rs 80: Magnum

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26 Aug, 2025 12:21

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Magnum`s research report on IOL Chemicals“IOL Chemicals and Pharmaceuticals Ltd (IOLCP) a leading organic chemicals and bulk drugs manufacturer & supplier. The company manufactures APIs, Organic Chemicals and drug Intermediates. The company was incorporated in the year 1986.The company is having two segments viz chemicals and pharmaceuticals. Under chemical division, the company manufactures chemicals like Ethyl acetate, Acetic anhydride, MCA, IBB, Acetyl chloride. Under Pharma division, the company manufactures various APIs viz Ibuprofen & life maintenance drugs. India’s chemical industry is one of the largest and most diversified industries in the country. It consists of several small industries that cover hundreds of segments. Chemicals are generally used to make a wide variety of consumer goods and are also used in agriculture, manufacturing, construction, and service industries. The chemical industry itself consumes 26% of its own output. The growth of chemicals is projected at 10% in 12th five year plan. India emerges as one of the focus destinations for chemical companies worldwide.""This Industry currently tops the chart with wide range of capabilities in manufacturing of complex drugs & due to generic business manufacturing hub. Indian pharmaceutical industry is a highly knowledge based  industry and is ranked world class in terms of technology, quality, purity, stability and international safety, health and environmental protection in production and supply of bulk drugs. The government of India has aggressively granted 100% FDI in drug & Pharma sector to establish various Pharma SEZs across the country. Indian pharmaceutical industry is an important contributor to the foreign reserve of the country with around 50 percent of industry revenue coming from overseas market.""The company is all set to grow mutli fold in coming years with the pilot plant designed as per guidelines of ICH Q7 for USFDA and EDQM approvals. It is equipped with Kilo Lab facility for process optimization and technology received from research and development. Four stage ETP treatment process make company Zero effluent discharge. The plant is capable of conducting variety of reactions including pressure reactions. With all major approvals & still some to come on the way the company looks good for investment. Investment rationale: The Industry PE stands at 24x and company’s PE at ~15.76x FY15E & ~7.6x FY16E. The Stock could be looked upon for Buying in Short term with target of Rs 78.00-80.00. Also the long term view is positive for Buying with target of Rs 120.00,” says Magnum research report.

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