IOL Chemicals & Pharmaceuticals has reported a strong start to the fiscal year, with robust growth in both revenue and profitability for the first quarter ended June 30.

Financial Highlights

• Revenue from operations increased by 9.8% year-on-year to Rs. 552.00 crores, up from Rs. 502.00 crores in the same quarter of the previous year.
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) rose by 19.5% to Rs. 69.50 crores, compared to Rs. 58.20 crores in the same quarter last year.
• EBITDA margin improved by 102 basis points to 12.4%.
• Profit After Tax (PAT) grew by 14.4% to Rs. 34.00 crores.
• Cash PAT stood at Rs. 55.00 crores, registering a growth of over 16% compared to Rs. 47.00 crores in the same quarter of the previous year.

Operational Performance

The company's newly commissioned 10,800 MTPA Paracetamol plant has begun exports to European markets and is currently operating at 34% capacity. IOL Chemicals expects this to reach 60% by Q3. The company is targeting a 50-50 split between Ibuprofen and non-Ibuprofen APIs, with non-Ibuprofen currently at a 34% share.

Export revenue comprises 25% of total sales, with plans to increase this to 40% over the next two years. The company received REACH registration for Acetic Anhydride in EU markets, opening up new opportunities for expansion in Europe.

Strategic Developments

IOL Chemicals has initiated the setup of Unit 9B by carving out part of the existing Unit 9 for manufacturing Minoxidil and its intermediates, expected to be completed by Q3. The company has also acquired a 100-acre land parcel near the Chandigarh-Bhatinda highway, with environmental clearance processes underway for future expansion.

Sustainability and Compliance

The company earned an EcoVadis Silver Medal for sustainability performance, placing it among the top 15% of companies globally for environmental, social, and ethical performance. IOL Chemicals continues to focus on regulatory advancements, with upcoming EU GMP audits planned for November.

Management Commentary

Abhay Raj Singh, Sr. Vice President & Company Secretary, stated, "Q1 has been a quarter of efficient execution marked by revenue growth, margin expansion, and resilient cash flow. This performance reflects the strength of our integrated business model and the strategic clarity with which we are navigating both opportunities and challenges."

Future Outlook

IOL Chemicals maintains its guidance of 14-15% EBITDA margins and 10% revenue growth for the full year. The company aims to achieve Rs. 2,000.00 crores in revenue from Ibuprofen and non-Ibuprofen segments combined within the next two years.

The management remains confident in its strategic focus on portfolio diversification, regulatory advancements, and operational excellence to drive growth and profitability in the coming quarters.

Investor Relations

IOL Chemicals has scheduled several analyst and institutional investor meetings in August, including participation in 'Emkay Confluence – India Ascending: The Next Leap', 'Systematix Group – Pharma & Healthcare Conference', and 'Antique - Build India, New India' events.

As IOL Chemicals continues to strengthen its position in both domestic and international markets, investors will be keenly watching the company's progress in achieving its strategic objectives and financial targets for the future.

IOL Chemicals & Pharmaceuticals has announced a strategic expansion plan focused on high-value Active Pharmaceutical Ingredients (APIs), global market penetration, and backward integration, alongside reporting robust financial results for Q1.

Strategic Expansion Initiatives

The company has outlined several key initiatives to drive sustainable growth:

1. High-Value API Focus: IOL Chemicals is targeting expansion in high-value APIs, with a particular emphasis on non-Ibuprofen products. The company reported that the majority of its non-Ibuprofen APIs are operating at utilization levels of 65-70%+, with select products exceeding 90%, indicating strong demand.

2. Global Market Penetration: The company has successfully obtained REACH registration under EU regulations for Acetic Anhydride, enabling exports across European Union markets. This move is expected to open up new growth avenues in Europe.

3. Backward Integration: IOL Chemicals has initiated a ₹5.50 crore project to set up Unit 9B for dedicated manufacturing of Minoxidil and its intermediates, with an expected completion by December 2025. The new unit will have an installed capacity of 120 MTPA.

4. UK Subsidiary Formation: The Board of Directors has approved the formation of a wholly-owned subsidiary in the United Kingdom, aiming to establish a local presence to serve customers in the UK and EU more efficiently and promote global business.

Q1 Financial Performance

IOL Chemicals reported strong financial results for the quarter:

• Revenue from Operations: ₹551.69 crore, up 9.8% year-on-year
• EBITDA: ₹69.50 crore, an increase of 19.5% year-on-year
• Profit After Tax: ₹34.00 crore, growing 14.4% year-on-year
• EBITDA Margin: Improved to 12.4% from 11.4% in the same quarter of the previous year

Segment Performance

The Pharmaceuticals segment continued to be the primary revenue and profit driver for IOL Chemicals.

Management Commentary

Vikas Gupta, Joint Managing Director of IOL Chemicals, commented on the performance: "We are delighted to report an outstanding start to the fiscal year, with Q1 results reflecting strong execution and strategic clarity. Despite challenging macroeconomic conditions and pricing pressures, with several key product prices having bottomed out, IOL has delivered impressive performance, underscoring the resilience of our integrated business model."

He further added, "Our continued focus on portfolio diversification is yielding results, with non-Ibuprofen APIs gaining traction across global markets. With the commissioning of our fully backward-integrated Paracetamol production unit, we are increasing our presence in both regulated and non-regulated markets."

Future Outlook

IOL Chemicals' strategic initiatives, including the expansion into high-value APIs, global market penetration, and backward integration, position the company well for sustainable growth. The formation of a UK subsidiary and the REACH certification for Acetic Anhydride are expected to strengthen the company's presence in European markets.

With a robust balance sheet and a strong innovation pipeline, IOL Chemicals appears confident in its ability to deliver sustainable growth and long-term value for all stakeholders. The company's focus on scaling high-value APIs, deepening its export footprint, and driving operational excellence aligns well with its growth strategy in the evolving pharmaceutical and specialty chemicals landscape.