Buy IOL Chemicals; target of Rs 118: Joindre Capital Services
Joindre Capital Services’s research report on IOL Chemicals
IOL Chemicals and Pharmaceuticals Limited (IOLCP) a one of the largest players in Specialty Organic Chemicals and Bulk Drugs (API’s), headquartered in Ludhiana (Punjab). IOLCP operates in two business segments, Specialty organic chemicals and Bulk Drugs with its manufacturing facility at Barnala (Punjab). IOLCP has its footprints in 56 counties and regularly supplying its high quality products to major pharmaceutical players like Sanofi Aventis (India and Hungary), Aristo Pharmaceuticals, Prati Donaduzzi E Cia Ltda (Brazil), Cipla, BASF (USA), UPL, Abbot India and ZIBO XINUA-Perrigo Pharmaceutical (China). With its backward integrated USFDA accredited Ibuprofen plant, IOLCP has emerged as favorable supplier abroad.
Hence we believe that at the current price of 69.5 the IOLCPL stock looks undervalued at a PE of 8x and 6x based of FY19E and FY20E and should be purchased at the current price for a price target of around Rs 118 over the next 12 to 18 months.
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