IOL Chemicals and Pharmaceuticals Ltd
NSE:IOLCP

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IOL Chemicals and Pharmaceuticals Ltd
NSE:IOLCP
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Price: 371.65 INR 0.45% Market Closed
Market Cap: 21.8B INR
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Earnings Call Analysis

Summary
Q1-2025

IOL Chemicals Q1 FY25: Decline in Income, Focus on Non-Ibuprofen Products

In Q1 FY25, IOL Chemicals reported a decline in total income to INR 510 crores from INR 570 crores YoY. EBITDA margin dropped to 11.4%, and net profit fell to INR 13 crores. The pharmaceutical segment remained stable, while the specialty chemicals segment faced pricing pressures. The company aims for 13%-15% EBITDA margins in the near future. Focus is on increasing revenue from non-ibuprofen segments, targeting 50% of API revenue in 3-4 years. CapEx plans include INR 200 crores for FY25, focusing on infrastructure and technology improvements.

Earnings Call Transcript

Earnings Call Transcript
2025-Q1

from 0
Operator

Ladies and gentlemen, good day, and welcome to Q1 FY '25 Earnings Conference Call of IOL Chemicals and Pharmaceuticals Limited. From the management, we have Mr. Pardeep Khanna, Chief Financial Officer; Mr. Abhay Raj Singh, Senior Vice President and Company Secretary; and Mr. Rakesh Mahajan, Advisor, Finance and Strategic; we also have an Investor Relations team Adfactors.

[Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Darshan Mankad from Adfactors PR for opening remarks. Thank you, and over to you, sir.

D
Darshan Mankad

Thank you, Manav. Good afternoon, everyone. We welcome you to the first quarter FY '25 earnings call of IOL Chemicals and Pharmaceuticals Limited. Before we begin the earnings call, I would like to mention that some of the statements made during today's call might be forward-looking in nature, and hence, it may involve risks and uncertainties included in rules related to the future financial and operating performance.

Please bear with us if there is a call drop during the course of the conference call. We would ensure the call is reconnected the soonest.

I now hand over the call to Mr. Abhay Raj Singh for his opening comments. Over to you, sir.

A
Abhay Singh
executive

Thank you, Darshanji. Good afternoon, everyone. First of all, I would like to thank you all for joining us for the Q1 FY 2025 earnings call of IOL Chemicals and Pharmaceuticals Limited. Hope you all have gone through the results and the investor presentation uploaded on our website as well as the website of exchanges.

For the context, let's take top-down approach and discuss global development first. Global growth is projected to be in line with April forecast of IMF at 3.2% in calendar year 2024 and 3.3% in calendar year 2025. Inflation is expected to continue to cool, although in many countries, the price pressures will take longer to unwind than they took to emerge.

Geopolitical uncertainty is elevated with nearly half of the world's population already voting or heading to the poll this year. Hot wars and trade tensions are flaring, the resulting risk is more frequent short [ spell ] of inflation. A lower expected glide path on rate cuts by the U.S. Fed Reserve which played an outsized role in global financial markets will have a larger impact on rate decisions by developing economy.

Consumer is spending and business investments remain strong in U.S. while job growth is still at its peak that is consistent with moderate economic growth.

The Eurozone economy is not strong, but it is clearly rebounding from a near recession last year. Demand in China is peak. Freight rates surge continues. Imports, exports, logistics cost sale is expected going ahead. RBI is likely to start cutting in the key benchmark interest rates as better monsoon and high crop sowing compared to the last year is expected to ease food inflation.

India's economy has exceeded growth expectations averaging 8.3% annual growth despite global uncertainties driven by a strong demand and continuous government efforts towards reform and capital expenditures.

In first quarter of fiscal year 2025, the Indian pharmaceutical sector experienced traction with U.S. being steady and strong domestic growth. Chronic therapies continue to see traction, while acute therapies are witnessing recovery. API companies observed a decline in price realization and continue to see opportunities over the long-term due to China Plus and Europe Plus One policy in regulated markets.

In regard to Specialty Chemical, a high channel inventory and destocking has led to continued volume and pricing pressure on the industry. In addition to this, continuous dumping by China and lower prices and hurting profitability. Normal monsoon and onset of timely rains has benefited agrochemicals segment with good volume growth.

With this update, I now hand over the call to Pardeepji, who will brief about our financial performance for the quarter -- first quarter of FY 2025.

P
Pardeep Khanna
executive

Thank you, Abhay. Good afternoon, everyone, and thank you for joining us today to discuss our performance for the first quarter ended 30th June 2024. I will take you through stand-alone financial highlights for the first quarter ended 30th June 2024.

The total income of the company in the first quarter of financial year '25 stood at INR 510 crores as against INR 570 crores in the corresponding quarter of financial year '24 and INR 511 crores in the previous quarter ended March '24. EBITDA for the quarter was INR 58 crores as against INR 80 crores in the corresponding quarter of financial year '24 and INR 58 crores in the previous quarter ended March '24. EBITDA margin for the quarter declined by 260 basis points to 11.4% as against 14% in the corresponding quarter of financial year '24 and 11.3% in the previous quarter ended March '24.

Net profit in the first quarter of financial year '25 was INR 13 crores as against INR 46 crores in the corresponding quarter of the last year and INR 28 crores in the previous quarter ended March 2024. With easing of operating expense, EBIT margin for the Pharmaceutical segment was maintained at 11.8% in quarter 1st of financial year '25, while EBIT margin for the Specialty Chemicals segment was 1% in quarter 1st of financial '25. The [ quarter ] 1st of financial year '25 was slightly increased to INR 150 crores as compared to INR 149 crores in the corresponding period of the last year, whereas it was [ INR 159 crores ] in comparison to previous quarter ended March '24.

R&D for the quarter was INR 4.66 crores as against INR 5.07 crores in the corresponding quarter of financial year '24 and INR 4.76 crores in the previous quarter ended March '24.

So with this, we open the floor for a question-and-answer session. Thank you very much.

Operator

[Operator Instructions] We have our first question from the line of Sheikh Mohammed, an individual investor.

U
Unknown Attendee

Sir, my first question is we are getting so many approvals from China and Europe. But we are not getting any kind of approval from U.S. What is the reason behind that? Any inspection nearby or any update for that?

A
Abhay Singh
executive

Thank you for asking these questions, but we are continuously talking about this in all the calls. And the reason is that the U.S. FDA their inspection is due since long. But when they are going to is not inspect is not informed by them, they normally do not inform to us. They just inform us within a day or maximum 2 or 3 days before the inspection and the inspection is by then decided by them itself.

But considering the situation, the post-COVID era situations, we are mostly into the lifestyle drugs, perhaps this is not into priority so that is why they are not inspecting the company like us as of now. But whenever they are going to inspect, most of the -- I think we filed the DMF for 15 drugs, so our 15 drugs may be considered as the U.S. FDA approved at a one go.

U
Unknown Attendee

Okay. That will help. Sir, another question is regarding EBITDA margins. Since last 4 to 5 quarter quarters, management is repeating the words like we will achieve 15% to 20% EBITDA margins, but it's not getting maintained. What is the reason behind that, sir? And what is the EBITDA margins we are expecting?

R
Rakesh Mahajan
executive

We are margins as explained earlier, EBITDA margins around 15%. But due to the volatility in the raw material prices and decrease -- substantial decrease in prices, especially API named as paracetamol and metformin, we were not able to achieve that margin, which we were expecting around 1 year, past one year. The prices of paracetamol was reduced by around 40% in the last 1 year, more than 40%. And for metformin, it was reduced up to 20% -- 15% to 20%. That may be the reason for lower margin of EBITDA which we could not able to see which we were projecting in the initial of the financial year.

U
Unknown Attendee

Okay. Sir. Sir, what do you see for next few quarters? Any tailwinds for that or same like of margins will be remaining?

R
Rakesh Mahajan
executive

See, we indicate that -- I think we have also mentioned in the last call also that the prices are now bottom out. We think it may not go down beyond these numbers. And within 2 quarters, it may be -- 1 or 2 quarters it may be on the north side.

P
Pardeep Khanna
executive

We expect 13% to 15% EBITDA margin in the near future.

U
Unknown Attendee

Okay, sir. And sir, regarding the investor as an investor-friendly company. So since long, we haven't given bonus or any kind of split or any kind of buyback. Don't you think we -- and the rules of buyback has also changed in recent budget. Don't you think we should bring any kind of investor-friendly actions?

A
Abhay Singh
executive

So bonus and the split, we can discuss this. Dividend, so we can discuss in the Board and the Board will take a decision on it. But as of now, there has not been any decision. But split, let the prices of the stock to be that level. Also, the company can all consider the split. But as of now, no decision has been on it. So we can't comment on it.

U
Unknown Attendee

We have cash, we can bring buyback?

A
Abhay Singh
executive

Cash is there, you are right, but our priority as of now is to enhance the business, increase the capacities of the various products and the cash is there to -- for grabbing any good opportunity in the market. So that is the main purpose we are holding up the cash. If we do the buyback, it would -- investor-friendly move, but our priority as of now is to have the business increase more -- at a higher level than we will be considering for a buyback.

Operator

[Operator Instructions] The next question is from the line of Pradeep Rawat from Yogya Capital.

P
Pradeep Rawat
analyst

So I'm pretty new to the company, so apologies if the questions are repetitive. So my first question is regarding our margins. So what is the margin for our Chemical and other API division? And what is the margin for ibuprofen division?

R
Rakesh Mahajan
executive

We can't give product-wise margins. It can be discussed in separate internal policy of company to not to discuss these margin product-wise. We can discuss them on separate call.

P
Pradeep Rawat
analyst

Yes. Okay. I will take that call a separate call. So my next question is regarding the competition ramping up in ibuprofen market. So recently, we saw a company doing a CapEx of 12,000 tonne per annum for ibuprofen. So how do you see the dynamic panning out in this industry?

R
Rakesh Mahajan
executive

We are very -- we are the largest player of ibuprofen since last -- more than a decade. And we are concentrating only on our clients, our regulatory approvals, our qualities and other after-sales services. So we are not -- have a policy to comment on any competitor's CapEx and other thing. But we have our own strategy to tackle competition in time to come because we are the only company in the backward integration.

P
Pradeep Rawat
analyst

Yes. Understood. So are we expecting any kind of like price drawdown or margin drawdown with respect to overcapacity in the industry?

R
Rakesh Mahajan
executive

The prices are already, I think, bottom out. And we are getting regular order at certain prices of ibuprofen. So we don't fear any bottom out of -- more reduction of prices in ibuprofen.

P
Pradeep Rawat
analyst

Yes. And my last question is regard to a shift toward non-ibuprofen business. So going forward, what kind of like revenue contribution do we expect from non-ibuprofen business?

R
Rakesh Mahajan
executive

Down the line around 3, 4 years, we are targeting 50% turnover of API segment from non-ibu segment, which is presently around 20%.

Operator

[Operator Instructions] The next question is from the line of Priya Shah, a shareholder.

U
Unknown Shareholder

I have a couple of questions. First being, could you give a breakup of exports in Q1 FY '24 versus this quarter?

P
Pardeep Khanna
executive

In this quarter, we have a 30% export and 70% domestic turnover which is similar -- more similar to the last year export and domestic sales.

U
Unknown Shareholder

Okay. And on a Y-on-Y basis, we see that ibuprofen has seen lower decline in revenue in comparison to non-ibuprofen, so could you explain why is that so?

P
Pardeep Khanna
executive

We are focusing on the non-ibu business, but ibu business is stable. And we added a new product in our basket of APIs, so that you see the ibu share is decreasing and non-ibu share is increasing.

U
Unknown Shareholder

Okay. And also 1 more last question is that this quarter, we have seen a substantial decline in the other expenses. So could you give us some understanding on why is that so? And will this number be sustainably going ahead?

P
Pardeep Khanna
executive

Actually, in the last year, our power and fuel expenses are on the high side due to coal prices, which are now stable and decrease somehow and freight part is also on decreasing side, which is in the previous quarter and the previous year on the higher side.

Operator

We have a follow-up question from the line of Sheikh Mohammed, an individual investor.

U
Unknown Attendee

Sir, my question -- follow-up question is that are we planning any acquisition for that we are saving the money?

R
Rakesh Mahajan
executive

If any good opportunity which is beneficial for the company's shareholder or as a business comes in the market with a proper valuation, we may consider that. But as of now, our first priority is to grow organically. And in case any opportunity comes, we will reconsider it again.

U
Unknown Attendee

Okay. Sir, that will help. Another question is, I think in last quarter, in other expenses, there was some boiler expense was there. I don't know exactly. But I think some boiler expense was there, that's why last year, the other expenses were higher. Am I right or only the energy is the reason?

P
Pardeep Khanna
executive

Yes, you are right. So because of that, maintenance, our other expenses -- repair and maintenance are on a higher side and power and fuel expenses due to more power from the government, the power and fuel expenses are also on the higher side.

U
Unknown Attendee

So do you think from next quarter onwards, this type of expenses will be maintained or it will gradually increase or decrease?

P
Pardeep Khanna
executive

Yes, definitely maintained.

Operator

[Operator Instructions] The next question is from the line of Vishal from Systematix.

V
Vishal Manchanda
analyst

Sir, I joined a bit late, and I'm not sure whether this question is asked. I wanted to know the capacity utilization on ibuprofen and the non-ibuprofen basket?

R
Rakesh Mahajan
executive

So capacity utilization of ibuprofen presently is around 80% and for non-ibu, it has started increasing, which was earlier ranging from 40% to 70%, now it is minimum is 52%, it depends on the product to product.

V
Vishal Manchanda
analyst

So at an aggregate level, it is around 50% -- 52%?

R
Rakesh Mahajan
executive

No, no, on an average level, it is maybe around 59% to 60%.

V
Vishal Manchanda
analyst

Okay. And are we ramping up over quarters? So what was this utilization maybe a year back, same quarter?

R
Rakesh Mahajan
executive

For non-ibu, it is around -- which is presently 59% to 60% around 2 years back, it is around not more than 25% on an average. Now last year, it was around 50%, 52%.

V
Vishal Manchanda
analyst

Okay. And sir, just one observation. Like if I look at the balance sheet, we have almost doubled the gross block in the last 4 years. But our top line seems to be like almost where it was. So about a 10% -- it's almost just 10% higher or even less, 5% higher. So what actually has gone wrong in the last 4 years for us?

R
Rakesh Mahajan
executive

There is nothing wrong. We have incurred some of the CapEx on -- yes, we also for nonrevenue generation projects also, like ETP, boiler revamping, the [indiscernible] operations and some money incurred on the land also. And we have made some warehouses -- large warehouses in the storage capacity -- increased our storage capacity also.

V
Vishal Manchanda
analyst

Okay. So I think the land -- apart from the land and the ETP, so if effluent treatment plant would be to kind of be compliant with the norms that the government would have and land would probably come in at a later date?

R
Rakesh Mahajan
executive

We have ETP plant earlier around 10 years back, but we have set up another ETP plant in the location itself with a large capacity?

P
Pardeep Khanna
executive

Also, we have added a project manufacturing of paracetamol, acetic anhydride in the last 2 years.

V
Vishal Manchanda
analyst

All right. Got it. Sir, just wanted to understand like if we kind of -- the non-ibuprofen basket is at 60% utilization, how long can it take for us to be around 80%, 90% utilization and if prices remain at current level, what...

R
Rakesh Mahajan
executive

As you must go through that, we have started getting regulatory approvals from all the regulators, except still pending for U.S. FDA. So we are expecting a ramp-up of our capacity utilization at an optimum level within the next 2 years.

V
Vishal Manchanda
analyst

Okay. Right. And ibuprofen do you think prices can start to move up again because they have come down kind of almost at a...

R
Rakesh Mahajan
executive

We think -- it will not go down in the current level.

V
Vishal Manchanda
analyst

Sorry, sir?

R
Rakesh Mahajan
executive

We think these current prices it will not go down from the present level.

V
Vishal Manchanda
analyst

Okay. And you're not sure on when the upward trajectory would start, but they should not go below...

R
Rakesh Mahajan
executive

It's a market, no one predict exact numbers.

V
Vishal Manchanda
analyst

Right. We haven't seen any competitor moving out or closing down facilities, we haven't seen any such updates in the space?

R
Rakesh Mahajan
executive

There are limited number of players in the market for producing ibuprofen and 1 player we heard they are closing in U.S.

V
Vishal Manchanda
analyst

Sorry, closing?

R
Rakesh Mahajan
executive

They are going to close their facility in -- they are planning to close their facility in U.S.

Operator

We have our next question from the line of Neelam Punjabi from Perpetuity Investments.

N
Neelam Punjabi
analyst

My first question is on ibuprofen. So you mentioned that the capacity utilization was 80% for the quarter. And last quarter, you had mentioned it was 85%, whereas the revenue is pretty much flat on a Q-o-Q basis. So have the prices gone up during the quarter for ibuprofen?

R
Rakesh Mahajan
executive

No, no, the prices all almost remain the same. Whereas, the stock was reduced during that period. Prices are almost same levels from the last quarter. But we [indiscernible] our inventory.

N
Neelam Punjabi
analyst

Understood. Okay. Secondly, on the other API business. So this business has been largely flattish over the last 3 quarters at about INR 95 crores to INR 100 crores per quarter. So what is the growth that we are targeting for this segment in this year and next year?

A
Abhay Singh
executive

Neelamji, if you remember, we discussed these questions around 1.5 year back also over the conference call. At that time, we said just on a conservative side that we are very hopeful that this segment we will achieve around INR 500 crores by 2024, but that we could not achieve because of the substantial fall in the prices of some of non-ibu product.

If we think now that the time when we discuss and said that we will be crossing INR 500 crores mark on the non-ibu at that time, what was the rates if we put those rates at today's quantities, it is going to cross INR 600 crores as by 2024. So we were not knowing that how the prices are going to reduce and the prices were reduced very substantially for paracetamol and metformin and other products also.

So that is the reason. And you see it is stable, that means our quantity is going up. So we are selling more into the market, but price realization is not at that level. So that is the reason you see on the flat turnover. But in the marketing sense, we are growing.

N
Neelam Punjabi
analyst

So I understand that, sir. So how much is the volume growth for the other API business for this quarter on a Y-o-Y basis, if you can highlight that?

R
Rakesh Mahajan
executive

So volume -- yes, during the call I have already explained that from 42%, 43% as in non-ibu segment capacity utilization, it is around 59% to 60% during this quarter.

N
Neelam Punjabi
analyst

Got it. Okay. This is helpful. And could you help us understand in this other API revenue run rate of about INR 400 crores per annum, what would be the contribution of paracetamol and metformin, respectively?

R
Rakesh Mahajan
executive

The contribution of paracetamol is substantially reduced. We can explain only this figure now.

N
Neelam Punjabi
analyst

So out of this INR 95 crores of other API revenue, how much would be paracetamol? Can you highlight that revenue contribution, paracetamol and metformin both?

R
Rakesh Mahajan
executive

It is around -- company as a whole, sorry -- revenue-wise, it is not more than 10% to 12% of non-ibu segment because the prices are so crashed we intentionally reduced some capacity of paracetamol.

N
Neelam Punjabi
analyst

Got it. And what about metformin, is it the same, not more than 10% to 12% of revenue?

R
Rakesh Mahajan
executive

No, no, it is not -- it is around, you can say, 30% to 35%.

N
Neelam Punjabi
analyst

Okay. Got it. And we've received quite a few CEP approvals recently. So has our export contributions have been going up?

R
Rakesh Mahajan
executive

Yes. It has started increasing, queries has also increased. Visits of various technical people of respective clients are coming for audit purpose, and we are getting some trial orders or samples. The quantity of queries has been already increased, and we hope within 3, 4 quarters, improvement will be there.

N
Neelam Punjabi
analyst

Okay. And could you highlight what is the CapEx that you are targeting for FY '25 and '26?

R
Rakesh Mahajan
executive

It is again around INR 150 crores to INR 200 crores.

N
Neelam Punjabi
analyst

Per annum, both this year and next year, both?

R
Rakesh Mahajan
executive

This year also around -- this year, this financial year, it is around INR 200 crores and the next financial year it may be around INR 150 crores.

N
Neelam Punjabi
analyst

Okay. And where are we deploying this INR 200 crores this year, what is -- what projects are we undergoing?

A
Abhay Singh
executive

No. It was a mix of infra, land and technology development.

R
Rakesh Mahajan
executive

And growth also.

A
Abhay Singh
executive

And automation.

N
Neelam Punjabi
analyst

Okay. Are we increasing the capacity of any of the existing molecules like paracetamol or metformin or anything?

R
Rakesh Mahajan
executive

No, as of now, we are consolidating our non-API segment. Our first priority is to increase the capacity utilization of all the existing products and stabilize it at a certain level. After that, we will consider for any...

N
Neelam Punjabi
analyst

Got it. Okay. And lastly, I just wanted to know what's the net cash that we had as on 30th June?

R
Rakesh Mahajan
executive

It is around INR 190 crores in the bank.

Operator

We have our next question from the line of Pradeep Rawat, Yogya Capital.

P
Pradeep Rawat
analyst

So we have targeted to achieve 50% revenue from API segment, if I'm not wrong, so do we have products already developed for this ramp-up?

A
Abhay Singh
executive

No, this is not 50% revenue target from the API. This is within the API, the non-ibuprofen target is 50%.

P
Pradeep Rawat
analyst

Okay. So non-ibuprofen would be 50% target of overall revenue?

A
Abhay Singh
executive

No, not overall, within the API. Suppose if the API revenue today is INR 100 and out of INR 100 today's turnover if we talk about the 65% comes from ibuprofen and non-ibuprofen [Technical Difficulty].

Operator

Sorry, sir, we have the management line disconnected. [Operator Instructions] Ladies and gentlemen, we have the management back with us. Over to you, sir.

A
Abhay Singh
executive

Mr. Pradeep, I think you are there. So what I was saying is that the 50% target of the revenue is within the API. We have a target that 50% within the API should come from the non-ibuprofen portfolio other than the ibuprofen.

P
Pradeep Rawat
analyst

Okay, understood. Okay. So my next question is regarding our inventory days. So it has increased quite significantly from last -- from FY '23 to FY '24. So could you highlight the reason behind that?

R
Rakesh Mahajan
executive

As we have added new products in the market also, so the inventory has been increased accordingly for the new product like paracetamol, acetic anhydride that may be the reason to increase level of inventories in our finished product. And for raw material, we have got a good order from 1 vendor on [ alcohol ]. So our raw material was also increased during that period.

P
Pradeep Rawat
analyst

Okay. Understood. And you could you provide any guidance, any ballpark guidance for this year on the top line front?

P
Pardeep Khanna
executive

We hope 10% increase in the year -- in the current year.

P
Pradeep Rawat
analyst

Okay. And that could be on the volume front, right?

P
Pardeep Khanna
executive

No. No, both volume and price.

P
Pradeep Rawat
analyst

Okay. Okay. So how much would be -- are you assuming for price? And how much are you assuming for volume?

P
Pardeep Khanna
executive

I think more than 10% from the volume and 5% to 10% from the price.

P
Pradeep Rawat
analyst

Okay. 5% positive growth from price and more than 10% from volume?

P
Pardeep Khanna
executive

Yes.

Operator

[Operator Instructions] We have our next question from the line of Preeti Sharma from Invest First Advisors.

P
Preeti Sharma
analyst

I have a couple of questions. Are you planning to launch any new products in the non-ibu space this year?

A
Abhay Singh
executive

Preetiji, we are having various products into the pipeline. And our R&D team is continuously working on those such products but we have not finalized or we are not at a stage where we can announce any such products as of now. So whenever we decide, we will be coming out appropriate announcement, and we will -- then we will be discussing for those products.

P
Preeti Sharma
analyst

Okay. That's great, sir. Sir, my second question is in terms of the expansion. So what is the target for this year in terms of the geographical expansion, especially for the non-ibu products? And what kind of margin difference do we see between Europe and other foreign geographies, if you could highlight that?

A
Abhay Singh
executive

So if you see that most of our products are having the CEP, European CEP, so geographical expansion definitely will come from the European regulated market, Latin America as well. And the realization is basically depends from a product-to-product basis.

But in any case, around 20% to 25% are the better realization as compared to domestic price. This is -- I'm talking about on an average basis. If we talk to discuss -- if we discuss on a product-to-product basis, just some products may come on better realization to 25% and some may a little lesser than 25%.

Operator

We have our next question from the line of Tarak Kaur, an individual investor.

U
Unknown Attendee

Sir, I have 3 questions. The first question is the cost of raw material as percentage of revenue has gone up on Y-o-Y and Q-o-Q basis. Could you explain the reason behind it?

R
Rakesh Mahajan
executive

The prices of final product has been reduced, as we already explained, but the raw material which we have got earlier or we have imported from various countries earlier before 2 quarters or 3 quarters that will factor in this June quarter numbers. You can say high cost of inventory was there.

A
Abhay Singh
executive

So basically, it's a mismatch of the timing. Timing of the sale and the timing of the buying of the raw material.

U
Unknown Attendee

Okay, sir. And could you give us a sense of how we plan to improve our margins in Specialty Chemicals segment? And how we should look it going forward?

R
Rakesh Mahajan
executive

In Chemical, we are -- earlier, we are not able to get even positive numbers in the shape of bottom line. But from the last 2, 3 quarters, we are in the, you can say, some EBIT numbers are getting positive numbers. Again, we launched last year acetic anhydride to add value in the Chemical segment. Still we are exploring various export markets as we have got the certification for -- our one of the products that is ethyl acetate last year and now we are more focusing on the export of chemical also.

U
Unknown Attendee

Okay. And are we planning to do any capacity expansion in our existing plant?

R
Rakesh Mahajan
executive

In the Chemical segment or API?

U
Unknown Attendee

Overall, sir. As in chemical and as well as both.

R
Rakesh Mahajan
executive

Chemical, we had -- as of now, there is no immediate plan to launch expanded capacities. But we have some planning for new launches in the time to come in Chemical segment also.

Operator

We have our next question from the line of Vishal from Systematix.

V
Vishal Manchanda
analyst

Sir, on ibuprofen, can you share how much our revenue has declined in the last 4 years because of the price correction we have seen? Like what ibuprofen was 4 years back and what -- how much it is today?

R
Rakesh Mahajan
executive

Earlier around 4 years back, the prices of ibuprofen was ranging around $12. Now we are getting the average realization of $9 to $10, but our capacity utilization except 1 year in '22, the capacity utilization was around 55%. But after that, again, the capacity utilization has started increasing from 75% to 85% in FY '24, so you can calculate accordingly.

V
Vishal Manchanda
analyst

Right, sir, right. You talked about a U.S. player exiting. So they are 2 U.S. players, so right, if I'm...

R
Rakesh Mahajan
executive

We have heard in the newspaper that SI Group is planning to exit.

V
Vishal Manchanda
analyst

Okay. They are also backward integrated, right?

R
Rakesh Mahajan
executive

Yes.

Operator

The next question is from the line of Pradeep Rawat from Yogya Capital.

P
Pradeep Rawat
analyst

So continuing on the last question. So SI Group is exiting from the ibuprofen business, so what was its capacity?

R
Rakesh Mahajan
executive

We have heard in from the newspapers that they are exiting. But as for our internal sources, their capacity is around 4,500 to 5,000 tonnes.

P
Pradeep Rawat
analyst

Understood. Okay, understood. And my next question is regarding our peak revenue potential. So can you highlight that at constant rate, at current rates?

R
Rakesh Mahajan
executive

At current rate, it may be around INR 2,400 crores to INR 2,500 crores at a current rate.

P
Pradeep Rawat
analyst

So we are quite close to our peak revenue potential. So aren't we planning to do any type of expansion so that we can grow our asset base?

P
Pardeep Khanna
executive

Yes. So basically, peak revenue basically is the situation where we are selling into the domestic market or we are selling into the export market. Suppose if we sell -- increase our sales or market into the export market, our peak revenue can be any number from 3,000 to even more than that. So this is a question which cannot be answered over the call or this is a very imaginary question and imaginary answers as well because we don't know how much we are going to sell into the domestic market and how much we are going to sell into the export market.

So this is a very subjective question. So we cannot get the appropriate answer to this question. This is a calculation we can do having certain assumptions that how much percentage of every product we are going to sell into the export and how much we are going to sell into the domestic market.

R
Rakesh Mahajan
executive

As a INR 2,500 crore figure is calculated only on the existing rate, existing market and existing production...

P
Pardeep Khanna
executive

Production -- of the domestic as well as the export market. But our strategy is to increase our presence into the export market more than the domestic market...

R
Rakesh Mahajan
executive

Especially regulated markets.

P
Pardeep Khanna
executive

Yes, specifically regulated market. That's correct.

P
Pradeep Rawat
analyst

Yes. So how much do we generate revenue from export right now?

R
Rakesh Mahajan
executive

Around 30% of total revenue.

P
Pradeep Rawat
analyst

Yes. And how much are we planning for increasing it to?

R
Rakesh Mahajan
executive

Around 45% to 50%.

P
Pradeep Rawat
analyst

And any definitive timeline for that?

R
Rakesh Mahajan
executive

Maybe 3 to 4 years.

Operator

As there are no further questions, I now hand the conference over to Mr. Rakesh Mahajan for closing comments. Over to you, sir.

R
Rakesh Mahajan
executive

Yes. Thank you very much for joining today. It was clear discussing our first quarter FY '25 performance. Going ahead for our non-ibu segment, we continue to explore untapped opportunities in the regulated markets, launch new products and improving operational efficiency to drive sustainable growth. Further, the demand for Specialty Chemicals is gradually poised to improve going ahead.

Thank you very much for attending the call. Looking forward to keep interacting with you at all the time to come. Thank you very much. Have a nice day.

Operator

On behalf of IOL Chemicals and Pharmaceuticals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

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