The ratings however remain constrained by raw material availability and price volatility risk, and product concentration in its revenue profile. Going forward, the ability of the company to report improvement in operational performance and diversify the revenue stream would be key rating sensitivities, it said.
IOL is one of the leading APIs/ bulk drugs company and is a significant player in the specialty chemicals space. IOL says it has a wide presence across major therapeutic categories like pain management, anti-convulsants, anti-diabetes, anti-cholesterol, and anti-platelets.
The stock has zoomed 302 per cent from its 52-week low of Rs 147 touched on March 25, 2020, against 42 per cent rise in the S&P BSE Sensex during the same period.
IOL’s profitability margins improved significantly as reflected by an increase in PBILDT (profit before interest, lease, depreciation, and tax) margin from 24.74 per cent in FY19 to 30.84 per cent in FY20. The company registered a growth of around 12 per cent in total operating income to Rs 1,909 crore from Rs 1,695 crore, driven by an increase in sales volumes from 83,545 MTPA in FY19 to 1,12,640 MTPA in FY20 and higher sales realisation.
Further, the debt-to-equity ratio also stood at zero as compared to 0.46 times as on March 31, 2019, as the company has prepaid its all long term debt.