IOL Chemicals and Pharmaceuticals Limited

Healthcare — Drug Manufacturers - Specialty & Generic · NSE

₹194.40−₹0.68 (−0.35%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by high debt relative to equity, small-cap size, which brings sharper price swings.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:48 pm

Understanding the Business

Company site ↗

The 60-second version of IOL Chemicals and Pharmaceuticals Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

IOL Chemicals and Pharmaceuticals Limited manufactures and sells pharmaceutical and chemical products in India and internationally. It operates through two segments: Pharmaceuticals and Specialty Chemicals.

IndustryDrug Manufacturers - Specialty & Generic

SectorHealthcare

Employees3,095

Annual revenue₹2,308 Cr

How does it make money?

Turns over ₹2,308 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 3,095 employees supports ₹74.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹74.6 lakh

Who are its competitors?

The closest listed comparisons in its industry are SUN PHARMACEUTICAL IND L, DR. REDDY S LABORATORIES, CIPLA LTD, DIVI S LABORATORIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 10.2% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE14.5%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 18.2% and earnings to grow about 38.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+18.2%

Est. earnings growth+38.7%

Analysts1

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +5% while net margin moved -6% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+5%

Margin effect-6%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 1.6% — barely ahead of inflation
✗ Profit has declined at 0.4% a year

Quality vs. Valuation

Company Quality

46/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

44/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

34.0x

3Y Median

20.1x

40 monthly readings · mean 23.5x · range 13.3x–44.2x

Sector Median

33.3x

median of 4 sector peers

⚠️Current valuation is approximately 69% above its 3y median of 20.1x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟡Against its sector it is priced broadly in line with the peer median of 33.3x.

vs. its own history

Expensive

20.1x median over 40 months · +69%

vs. sector peers

Fair

33.3x median of 4 peers · +2%

vs. generic bands

Fair

15x–35x

EV/EBITDA

20.2x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 12.7% to 10.2% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 70% over 3 years, from ₹80 Cr to ₹135 Cr.
🔴High leverageFinancial
Debt/Equity of 7.53x — earnings must service borrowings before shareholders see anything.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 7.53x. Interest is payable whether or not the business has a good year.
The price already assumes success
The stock trades 69% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Growth barely outpaces inflation
Revenue compounding at 1.6% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 10%✓ 12.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 1.6% CAGR
Latest reported year was 37.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹41 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 10.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹5,706 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

34.0x

Fair

Fairly valued against the generic band

P/B Ratio

3.17x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹5.72

Profitable

Profitable on a per-share basis

ROE

7.7%

Weak

Weak capital efficiency

ROCE

10.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

7.53x

High

High leverage

Revenue Growth (YoY)

37.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

89.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.51%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹41 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

18.7x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

10.9%

Average

Average margins

Net Margin

6.7%

Average

Average bottom-line conversion

Current Ratio

1.78

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.54

Defensive

Steadier than the market

52W Range Position

81%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

203.5 / 190.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

44.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,202 Cr	₹2,119 Cr	₹2,068 Cr	₹2,308 Cr	+1.6%
EBITDA	₹246 Cr	₹255 Cr	₹220 Cr	₹286 Cr	+5.2%
EBITDA Margin	11.2%	12.0%	10.6%	12.4%	—
PAT (Net Profit)	₹139 Cr	₹134 Cr	₹101 Cr	₹138 Cr	-0.4%
EPS	₹4.74	₹4.58	₹3.44	₹4.69	-0.4%
ROE	9.2%	8.3%	6.0%	7.7%	—
ROCE	12.7%	11.4%	8.3%	10.2%	—
Total Debt	₹80 Cr	₹33 Cr	₹117 Cr	₹135 Cr	+19.3%
Free Cash Flow	-₹90 Cr	₹16 Cr	-₹35 Cr	₹41 Cr	—

🟡 Revenue has been broadly flat over 3 years (1.6% a year).

🟢 EBITDA has grown at 5.2% a year over 3 years.

🟢 EBITDA Margin has risen from 11.2% to 12.4% over 3 years (+1.2 pts).

🟡 PAT (Net Profit) has been broadly flat over 3 years (-0.4% a year).

🟡 EPS has been broadly flat over 3 years (-0.4% a year).

🔴 ROE has fallen from 9.2% to 7.7% over 3 years (-1.6 pts).

🔴 ROCE has fallen from 12.7% to 10.2% over 3 years (-2.5 pts).

🔴 Total Debt has grown at 19.3% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹90 Cr to ₹41 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,587 Cr

Total Liabilities

₹788 Cr

Cash & Equivalents

₹65 Cr

Operating Cash Flow

₹214 Cr

Capex

-₹173 Cr

Shareholding (proxy)

Institutional Holding

1.8%

Insider Holding

62.3%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

17 Feb 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹223

+14.7% vs CMP

Target Range

₹223 – ₹223

Peer Comparison

Company	P/E	ROE
SUN PHARMACEUTICAL IND L	34.9x	14.5%
DR. REDDY S LABORATORIES	31.0x	8.8%
CIPLA LTD	31.8x	9.8%
DIVI S LABORATORIES LTD	83.0x	17.5%

Recent News

3 mixed3 general

IOL Chemicals and Pharmaceuticals Share Price - Live NSE: IOLCP Stock Price & Chart

Upstox, 16 Oct

IOLCP Forecast — Price Target — Prediction for 2027

TradingView, 26 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

IOL Chemicals And Pharmaceuticals (IOLCP) Share Price rises 5.3% today

Univest, 06 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

IOL Chemicals surges 19%, up 136% since April; what's driving the stock?

Business Standard, 07 Jul

IOL Chemicals and Pharmaceuticals (IOLCP.NS) Climbs 4.47% to ₹214.90, Approaching Key Resistance - Growth Stock Picks

siam.in, 06 Oct

IOL Chemicals And Pharmaceuticals Ltd (BOM:524164) Q4 2026 Earnings Call Highlights: Record ...

Yahoo Finance, 25 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingBusiness Quality · Financial Health · Risk

WeakGrowth · Profitability · Valuation

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Revenue growth stays above 4% a year · see Key things to watch ↑