Detailed Narrative
Q4 & FY26 Financial Performance Highlights
IOL Chemicals reported a strong Q4 FY26 with revenue from operations growing 17.4% YoY to INR 619 crores, and EBITDA increasing by nearly 40% to INR 94 crores, resulting in a 15.2% EBITDA margin. For the full year FY26, revenue stood at INR 2,319 crores, an 11.5% YoY growth, with EBITDA at INR 290 crores, up 29% YoY, and an improved margin of 12.4% from 10.7% in the previous year. PAT for Q4 FY26 was INR 53 crores, a 68% growth, and for FY26, it was INR 138 crores, up 36%.
Capacity Expansion and Utilization
The company achieved high capacity utilization across its product portfolio. Ibuprofen, Metformin, Clopidogrel, and Fenofibrate are running at 85-95% capacity. Chemical products like acetic anhydride and ethyl acetate are operating at 98-100% utilization. The recently enhanced paracetamol capacity, which is 10,800 MT, is currently at 55% utilization, with a target to reach 70-75% in FY27 and full utilization by FY28, which is expected to lead to lower production costs due to automation.
Diversification Strategy and Product Mix
IOL Chemicals continues to strengthen its non-Ibuprofen API segment, which contributed approximately 38% to the pharma revenue in Q4 FY26, with Ibuprofen contributing 62%. Key non-Ibuprofen products like Paracetamol, Metformin, Clopidogrel, and Pantoprazole showed healthy demand. The company launched Minoxidil and expanded Pantoprazole capacity, aligning with its diversification strategy. The chemical business also performed strongly, with new commissioning of Triacetin further enhancing integration and supply chain efficiencies.
Capital Allocation and Greenfield Project
In FY26, the company incurred INR 160 crores in capex for capacity expansion, operational improvements, and infrastructure, entirely funded through internal accruals. For the new 100-acre land near Bhatinda Highway, the company plans a total investment of INR 1,200-1,400 crores over the next four to five years, with an annual capex of INR 200-250 crores. This capex will be phased and funded through internal accruals, with 60% allocated to growth activities and 40% to infrastructure and automation.
Export Strategy and Regulated Markets
The company is actively increasing its presence in regulated markets, particularly in Europe and indirectly in the US, for its non-Ibuprofen products. Non-Ibu exports are targeted to grow by 25% in FY27. For Ibuprofen, exports already constitute 45% of sales, primarily to Europe. While direct sales to the US for Ibuprofen are limited, the company serves the market indirectly. Management noted that export realizations are generally better than domestic sales, though this varies by product.