IOL Chem and Pharma Q3 FY26 earnings call
In brief
Q3 FY26 revenue ₹580 cr (+10.9%), EBITDA margin 10.7%; guides FY27 10-15% top-line, 15-20% bottom-line growth
- Management's tone
- Mixed
- What was said
- Mixed
- Guidance
- Guidance cut
- Analyst pushback
- Medium
- Stock, next session
- −0.90% (Nifty 50 −0.57%)
- Q3 FY26 revenue grew 10.9% YoY to ₹580 cr; EBITDA at ₹62.6 cr (+22.8%) with margin expanding 100 bps to 10.7%.
- Guides FY27 to 10-15% top-line and 15-20% bottom-line growth; FY27 capex at ₹150-200 cr.
- Q4 FY26 revenue targeted at ~₹600 cr with EBITDA margin ~11%; management said Q3 fell short by ₹2-3 cr on power costs.
- Exceptional ₹11.2 cr provision booked for new labor law covering past-service gratuity and earned leave.
- Board declared 50% interim dividend for FY26.
An AI read of the company's transcript · the filing
The numbers
The quarter, Q3 FY26
| This quarter | A year ago | Last quarter | Margin | |
|---|---|---|---|---|
| Revenue | ₹580 cr | +10.9% | +2.3% | |
| EBITDA (excl. other income) | ₹46.1 cr | −1.7% | −19.3% | 7.9% (9% a year ago) |
| Net profit | ₹20.6 cr | +0.2% | −31.3% | 3.5% (3.9% a year ago) |
| EPS (₹) | ₹0.70 | −80.0% | −31.4% |
From the company's filed results for the quarter ended 31 Dec 2025 (consolidated), not from the call. EBITDA here excludes other income, so it can differ from the figure management quotes.
Where management's figures differ from the filing
- Q3 FY26 EBITDA: said ₹62.6 cr, margin 10.7%; filed ₹46.07 cr ex-other income, margin 7.9%. Stated EBITDA excludes the ₹11.2 cr exceptional labor law provision and includes ₹5.29 cr other income; filed excludes other income and reflects post-exceptional PBT.
What moved the numbers, as management explained it
- Higher capacity utilization across ibuprofen, non-ibuprofen APIs and ethyl acetate drove EBITDA margin expansion (volume).
- Rice husk fuel prices remained elevated in Q3 (~450-500 MT/day consumption) keeping power/fuel cost at Q2 levels (cost).
- Exceptional ₹11.2 cr provision for new labor law redefinition is non-recurring and distorts reported PAT (one_off). (one-off)
- Paracetamol underutilization at ~60% and competitive paracetamol pricing weighed on pharma EBIT margin (volume).
- Mix shift toward non-ibuprofen APIs (rose from 34% to 36% of pharma) supported revenue quality (mix).
The numbers management led with
- Interim dividend: 50% per equity share for FY25-26
- FY27 revenue target: INR2,700 crores (INR1,800 cr API + INR900 cr Chemical)
- FY27 capex guidance: INR150-200 crores; FY26 capex INR130-135 crores
- Q4 FY26 revenue target: INR600 crores
Guidance
Guidance on this call
| What | For | What management said | Filed |
|---|---|---|---|
| Q4 FY26 revenue | Q4 FY26 | Q4 FY26 revenue expected at ~₹600 cr | ₹619 cr, above the figure guided |
| Q4 FY26 EBITDA margin | Q4 FY26 | Q4 FY26 EBITDA margin approximately 11% or better | 14.9%, above the figure guided |
| FY27 top-line growth | FY27 | FY27 minimum 10-15% revenue growth | — |
| FY27 bottom-line growth | FY27 | FY27 15-20% bottom-line growth | — |
| FY27 capex | FY27 | FY27 capex guided at ₹150-200 cr | — |
| FY27 total revenue target | FY27 | FY27 total revenue target ~₹2,700 cr | — |
| FY27 API revenue target (Pharmaceuticals (APIs)) | FY27 | FY27 API revenue target ~₹1,800 cr | — |
| FY27 Chemicals revenue target | FY27 | FY27 Chemicals revenue target ~₹900 cr | — |
| FY26 blended EBITDA margin | FY26 | FY26 blended EBITDA margin now expected at 11-12% | 11.1%, within the range |
| Minoxidil final API commercialization (Pharmaceuticals (APIs)) | Q1 FY27 | Minoxidil final API launch targeted for Q1 FY27 | — |
Filed figures are summed from the company's own quarterly results for the whole period (EBITDA excludes other income); where one sits against what was guided is arithmetic, not a judgement.
What changed since the Fri 8 Aug 2025 call
| What | On the Fri 8 Aug 2025 call | On this call |
|---|---|---|
| FY26 blended EBITDA margin target (cut) | Reiterated 14-15% blended EBITDA margin for FY26 (Q1 FY26 call) | Now expects 11-12%; 14-15% no longer achievable citing fuel costs |
| H2 FY26 margin target (cut) | Expected 13-14% EBITDA margin in H2 FY26 (Q1 FY26 call) | H2 FY26 13-14% target missed; only 1-2% sequential improvement expected in Q4 |
| Minoxidil commercialization (delayed) | 120-tonne Minoxidil plant commercial by Q3 FY26 (Q1 FY26 call) | Minoxidil intermediate in merchant sales; final API commercial launch now Q1 FY27 |
| FY27 revenue growth (held) | 10-15% revenue growth was the FY26 guidance (Q1 FY26 call) | 10-15% revenue growth reaffirmed for FY27 |
| FY27 bottom-line growth (new) | Not separately guided (Q1 FY26 call) | 15-20% bottom-line growth guided for FY27 |
| FY26 capex (cut) | Capex guided at ₹150-200 cr annually (Q1 FY26 call) | FY26 actual tracking at ₹130-135 cr; FY27 to be ₹150-200 cr |
| Total revenue target (restated) | Total API revenue target ₹2,000 cr in 2-3 years (Q1 FY26 call) | FY27 total revenue target ~₹2,700 cr (API ₹1,800 cr + chemicals ₹900 cr) |
Guided on earlier calls, and what was filed
| What | For | Guided | Filed |
|---|---|---|---|
| Company revenue growth | FY25 | 10–12% (on the Q4 FY24 call) | -2.5%, below the range |
| EBITDA margin | FY25 | 12–15% (on the Q4 FY24 call) | 9.7%, below the range |
| PAT margin | FY25 | 7–8% (on the Q4 FY24 call) | 4.9%, below the range |
| Consolidated EBITDA margin | FY26 | at least 15% (on the Q4 FY25 call) | 11.1%, below the range |
| Consolidated revenue growth | FY26 | 10–15% (on the Q4 FY25 call) | 11.5%, within the range |
| Blended EBITDA margin | FY26 | 14–15% (on the Q1 FY26 call) | 11.1%, below the range |
| Revenue growth | FY26 | 10% (on the Q1 FY26 call) | 11.5%, above the figure guided |
| Quarterly top line | FY26 | ₹600 cr (on the Q1 FY26 call) | ₹2,319 cr, above the figure guided |
| H2 FY26 EBITDA margin | H2 FY26 | 13–14% (on the Q2 FY26 call) | 11.5%, below the range |
| H2 FY26 revenue growth | H2 FY26 | 10–12% (on the Q2 FY26 call) | 14.2%, above the range |
Filed figures are summed from the company's own quarterly results for the whole period (EBITDA excludes other income); where one sits against what was guided is arithmetic, not a judgement.
The business
By business
Pharmaceuticals (APIs)
Revenue ₹356 cr (61% of total); Ibuprofen ₹228 cr, non-Ibuprofen ₹128 cr; pharma EBIT margin ~9.7% Q3 vs ~10.5% Q2.
Revenue ₹356 cr (61% of total) · Ibuprofen ₹228 cr · Non-ibuprofen ₹128 cr · Pharma share rose from 57% to 61% YoY · Ibuprofen capacity utilization 90-95% · Paracetamol utilization ~60%
Outlook: Paracetamol ramp-up, metformin facility conversion, minoxidil final API launch Q1 FY27; targeting 50-50 ibu/non-ibu mix within 2 years.
Chemicals
Revenue ₹224 cr (39% of total); EBIT margin ~2.2% Q3 vs ~1.8% Q2; ethyl acetate plant at near-100% capacity.
Revenue ₹224 cr (39% of total) · Chemical EBIT margin ~2.2% Q3 vs ~1.8% Q2 · Chemical capacity utilization near 200% · Ethyl acetate plant ~100% utilization
Outlook: Ethyl acetate prices stable; FY27 chemicals revenue target ~₹900 cr; stable demand.
Balance sheet, capex and funding
- FY26 capex tracking at ₹130-135 cr vs ₹150 cr budget; 60% toward growth, 40% infrastructure and automation.
- FY27 capex guided at ₹150-200 cr (similar annual run-rate).
- Total inventory ~₹350 cr; API inventory declined QoQ.
- Operating cash flow described as healthy; financial position stable per management.
- No specific gross debt or net cash position disclosed on this call.
The industry, as management sees it
Ibuprofen market growing at 3% to 4% globally per year; some capacities closing down (one US plant last year). IOL positioning as a stable player with 90%+ utilization in a market that remains competitive but not oversupplied for the company. Europe and MENA cited as the strongest demand geographies for non-ibu APIs.
Risks management named
- Rice husk fuel cost volatility — current consumption 450-500 MT/day; off-season price increases persist
- Paracetamol plant running at 60% utilization pending capacity expansion
- Geopolitical and global headwinds affecting demand environment
Q&A
Q&A was dominated by margin trajectory and capacity utilization discussions, with multiple analysts pushing on the disconnect between healthy volumes and margin compression. The most material moment was the explicit downgrade of H2 FY26 EBITDA margin guidance from 13-14% to 11-12%, with management attributing it to rice husk fuel cost inflation and paracetamol underutilization. Forward-looking questions on FY27 capex, revenue targets (INR2,700 cr), and long-term product mix (75% API / 25% chemical; 25% ibu / 75% non-ibu) were answered with concrete numbers. Pushback was strongest on specific margin numbers and R&D pipeline, with management deflecting on PAT guidance, new-land product strategy, and patent commercialization.
Not answered directly
- Q4 FY26 PAT guidance
- R&D and patent commercialization status
- New land parcel product strategy
- Detailed product pipeline and timelines
Asked for a number, answered without one
- Q4 FY26 PAT figure: Management declined to give a specific PAT number citing regulatory prudence; only guided to ~₹600 cr revenue and ~11% EBITDA margin.
- R&D pipeline specifics: Said 3 process patents (sitagliptin, vildagliptin, losartan) are not in commercial production; declined to name specific pipeline products or timelines.
- Products for new land parcel: Said products are under development; mix of API and chemicals but specific molecules and timing not disclosed; awaiting NHC and other NOCs.
Every question, with its answer
1. Margin drivers
Jay, Star Investments
Question. EBITDA margin improved to 10.7% in Q3 and 11.4% for 9M. Could you give a detailed breakdown of what drove this margin expansion?
Answer, Mr. Rakesh Mahajan, Advisor. The primary driver of the margin increase was improved capacity utilization across various products.
Partly answered.
2. Ibuprofen pricing and capacity
Jay, Star Investments
Question. What is the current pricing environment for ibuprofen APIs? Are you facing any margin pressure due to oversupply or has pricing stabilized?
Answer, Mr. Rakesh Mahajan, Advisor. Our ibuprofen plant is running around 90% to 95% capacity utilization, and we are not facing any problems relating to oversupply. Capacity utilization continues above 90% to 95%.
3. Chemicals EBIT drivers
Jay, Star Investments
Question. Chemicals EBIT for 9M FY26 has nearly doubled YoY. What are the key drivers? Is it volumes or realizations? How confident are you about sustaining this?
Answer, Mr. Rakesh Mahajan, Advisor. Our capacity utilization for the Chemicals division is almost 100%; we are running our ethyl acetate plant at full capacity. The increase in EBIT is primarily attributable to full utilization of capacity.
4. Power and fuel cost
Jainam Ghelani, Svan Investments
Question. In Q2 we faced a one-time power cost of INR7-8 cr due to Punjab floods. Has power cost normalized in Q3, or was it higher again?
Answer, Mr. Pardeep Kumar Khanna, Chief Financial Officer. You are right, power cost increased in Q2 due to floods in Punjab. But due to non-reduction of fuel prices in Q3, the power and fuel costs remained at the same level as in Q2.
5. Ethyl acetate and paracetamol pricing
Jainam Ghelani, Svan Investments
Question. What is the pricing scenario for ethyl acetate and paracetamol — stable QoQ or some change?
Answer, Mr. Rakesh Mahajan, Advisor. Almost stable prices for ethyl acetate and paracetamol. However, the quantities are going to increase for IOL. Kushal Kumar Rana added that paracetamol capacity is being increased gradually at the same pricing.
6. H2 FY26 EBITDA margin guidance
Jainam Ghelani, Svan Investments
Question. In the previous call, you mentioned 13-14% margins in H2. Do you expect to maintain that or feel it could be lower?
Answer, Mr. Pardeep Kumar Khanna, Chief Financial Officer. We were not able to achieve the target EBITDA margin of 13-14% because of unexpected rise in fuel cost. We now hope to do better in the coming quarter. We expect the EBITDA margin to improve by 1% to 2% in the coming quarter.
Partly answered.
7. FY27 capex guidance
Jainam Ghelani, Svan Investments
Question. What are the capex plans for FY27?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. Capex is still to be finalized, but as considered in the last con call, the capex regularly done is approximately INR150 crores to INR200 crores. For FY27 we will also be doing the same level of capex.
8. Cost increase breakdown
Maulik, B&K Securities
Question. Other expenses have increased ~6% QoQ and 20% YoY. For 3Q, can you quantify how much costs have increased factoring in fuel cost?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. In Q2, the cost increase was due to fuel prices going up and some one-time personnel expenses. In Q3, fuel costs were expected to come down but could not because husk prices remained at the same level or inched up slightly. Other costs relate to marketing and general expenses.
9. Q4 EBITDA margin outlook
Maulik, B&K Securities
Question. You mentioned a 1 percentage point increase in EBITDA margin — was this for Q4 or Q1 FY27?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. We are talking about Q4. We were expecting a little higher EBITDA in Q3 also; we missed by INR2-3 cr, which is not a big amount, and we are very sure that we will be making up in Q4.
10. Q3 revenue mix ibu vs non-ibu
Maulik, B&K Securities
Question. Can you quantify how much was the revenue for ibu and non-ibu?
Answer, Mr. Pardeep Kumar Khanna, Chief Financial Officer. Total revenue this quarter INR580 cr, of which pharma is INR356 cr (61%) and chemical INR224 cr (39%). Further dividing pharma: ibu is INR228 cr and non-ibu is INR128 cr.
11. FY27 growth outlook
Maulik, B&K Securities
Question. How do we expect 4Q and FY27 to look like? Do you stick to 10-15% revenue growth for FY27? What is the outlook for paracetamol, metformin, and ibu?
Answer, Mr. Pardeep Kumar Khanna, Chief Financial Officer. In the coming year, we expect minimum 10% to 15% growth in top line and 15% to 20% in bottom line. We are focusing on exports of pharma products and are in touch with big customers. Steps taken to increase non-ibu share; we have potential for forward integration and are backward integrated in ibu and paracetamol.
12. Capacity utilization consolidated
Maulik, B&K Securities
Question. What would be the consolidated capacity utilization for chemicals and pharma?
Answer, Mr. Pardeep Kumar Khanna, Chief Financial Officer. For Pharma, we are utilizing more than 90% capacity except paracetamol, for which we are expanding. For chemical, generally mainly near 200%.
13. Non-ibu regulated market share
Surabhi, NV Alpha
Question. Within the non-ibu portfolio, how much of it is currently coming from regulated markets?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. Overall export contribution of non-ibu is around 15% to 17%. Majorly we are exporting to the European and the regulated markets. This is around 15% coming from regulated market.
14. FY27 pharma growth drivers
Surabhi, NV Alpha
Question. In pharma, apart from paracetamol, all other capacities are optimally utilized. Will growth next year come mainly from paracetamol, or are there capex plans for other APIs?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. Paracetamol is the growth driver. Another driver is the conversion in the demography — the non-ibu domestic will be shifted to the regulated market. Third is metformin: the previous facility where we were making paracetamol will be converted back to metformin. As we near 100% capacity utilization, we are also working on increasing capacity for a few products.
15. Forward integration model
Surabhi, NV Alpha
Question. What does forward integration mean — is it into formulation?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. We are planning forward integration, but not in formulations. The model is CMO (Contract Manufacturing) for API only.
16. Capex allocation split
Varun Mishra, Bawa
Question. Can you provide more details on capex allocation for FY26 and FY27 — how much is for pharma vs chemicals, and what incremental capacity will this create?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. Total capex for FY26 is around INR150 cr; we may go a little less at INR130-135 cr. Out of this, 60% is for growth. The rest 40% is for infra development and automation. Pardeep Khanna confirmed the 40% for infra development and automation.
17. Land parcel progress
Varun Mishra, Bawa
Question. What is the update on the recently acquired land parcel — progress and intended use?
Answer, Mr. Kushal Kumar Rana, Director Works. As discussed in the last call, the Environment Clearance (EC) has been granted by the Ministry of Environment and Forest. The next step is getting approvals from national highway authorities and other NOCs and consents to operate; that process is ongoing.
18. Minoxidil CEP and commercialization
Varun Mishra, Bawa
Question. Regarding the CEP for minoxidil — how do you plan to leverage it for European market expansion and broaden the non-ibu portfolio?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. We recently got the CEP. Earlier we announced commercializing minoxidil plant by end-December as part of unit 9. Currently, minoxidil intermediate is being supplied as merchant sale. Initial strategy is to launch final API minoxidil in international regulated markets, hoping to start in Q1 of next financial year. This will enhance the non-ibu API portfolio.
19. Revenue mix evolution
Vruddhi Vora, SAS Capital
Question. Pharma share rose from 57% in Q3 FY25 to 61% in Q3 FY26. What is the ideal revenue mix between ibu APIs, non-ibu APIs, and the Chemical segment going ahead?
Answer, Mr. Pardeep Kumar Khanna, Chief Financial Officer. The revenue mix of ibu and other APIs in Q3 FY26 is 64% and 36% respectively. In the corresponding quarter of December '24, ibu was 66% and other API 34%. So ibu decreased by 2% and other API increased by 2%.
20. Long-term revenue mix target
Vruddhi Vora, SAS Capital
Question. How should we think about the balance between these businesses in terms of sustaining growth and margin quality over the medium-term?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. For the next few years, the near-term target is 60% from API and 40% from chemical. However, the long-term ideal we are thinking is 25% chemical and 75% API. Within APIs, the near-term objective is 50:50 ibu to non-ibu, but we are trying to further improve to 25% ibu and 75% non-ibu over 4-5 years. The 60-40 API-chemical mix is achievable in the next 2 years.
21. Geographic demand momentum
Vruddhi Vora, SAS Capital
Question. Which geographies are currently showing the strongest demand momentum from the pharma portfolio, particularly the non-ibu APIs?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. Since the beginning, our concentration has been more in Europe.
Partly answered.
22. Expansion geographies
Vruddhi Vora, SAS Capital
Question. Where are you planning to expand going ahead, and how are these markets expected to contribute to growth and margin sustainability?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. The overall European Union, the complete Europe as well as the MENA countries.
Partly answered.
23. FY27 peak revenue target
Vruddhi Vora, SAS Capital
Question. What is the peak revenue potential you foresee from both ibu and non-ibu segments over the next few years?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. By FY27 we expect to reach INR2,700 crores from overall business including chemical and API. Out of this, INR1,800 cr comes from API and INR900 cr from chemical. We are targeting a 50:50 ratio for FY27 from ibuprofen and non-ibuprofen.
24. Margin evolution outlook
Vruddhi Vora, SAS Capital
Question. How do we expect the margins to evolve with the changing product mix and market?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. CFO already discussed: for next year, around 10% to 15% upside from the current margin profile.
Partly answered.
25. Chemical EBIT margin QoQ
Maulik, B&K Securities
Question. In 2Q, chemical EBIT margin was around 1.8% due to lower-cost inventory; this quarter is 2.2%. What is the reason for the QoQ growth?
Answer, Mr. Rakesh Mahajan, Advisor. It was a little off-center as you mentioned. There is a little gain of inventory valuation also, but the primary reason for increase in EBIT margin is capacity utilization.
26. Pharma EBIT margin decline
Maulik, B&K Securities
Question. Pharma EBIT margins reduced from 10.5% to 9.7% sequentially despite healthy utilization. What is the reason?
Answer, Mr. Rakesh Mahajan, Advisor. The prices of paracetamol and underutilization of para capacity, which is running at around 60%, drove this decreasing numbers. Pardeep Khanna added that we are focusing mainly on volume and capacity utilization, so margins are in line. We will focus on pricing in the future.
27. EU focus clarification
Maulik, B&K Securities
Question. You mentioned focus on the EU market going ahead — is this for API business or consolidated for chemical plus API?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. Not just going ahead, but since the beginning our focus has been on complete Europe and MENA countries. We will continue to focus on these territories and also look at other parts of the world. This focus is for both API and chemicals.
28. Exceptional loss explanation
Shaikh Mohammad Ayaz, Individual Investor
Question. What exactly is the exceptional loss of around INR11 crores and where does it come from?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. The central government regulated all labor laws and unified 29 laws into 4. Out of these, the wage structure and definitions were redefined. Because of this, the difference of past services of all employees works out to INR11.21 crores. This is against the gratuity calculations as well as the earned leave calculations. This is a one-time provision relating to the past employment of existing employees.
29. Fuel cost composition
Shaikh Mohammad Ayaz, Individual Investor
Question. Which fuel has increased — petrol, diesel, CNG, or coal? Why has the fuel cost gone up if there is no rise in petrol/diesel/CNG?
Answer, Mr. Kushal Kumar Rana, Director Works. We use coal and rice husk (a biodegradable material from farming lands) as input for our boilers. In Q2, heavy rains meant husk in open areas was unusable even from stock. This quarter, the prices of husk have increased. Current consumption is around 450 to 500 metric tons per day.
30. Rice husk price outlook
Shaikh Mohammad Ayaz, Individual Investor
Question. Will rice husk prices remain high in future as well?
Answer, Mr. Kushal Kumar Rana, Director Works. It depends, sir. Like when there is an off-season, it is always in the increasing trend. Other options exist, such as paddy straw briquettes, but their cost of production is more than rice husk.
31. Q4 FY26 revenue and PAT guidance
Shaikh Mohammad Ayaz, Individual Investor
Question. What is the expected revenue and PAT in Q4? Will you reach INR600 crores in revenue next quarter?
Answer, Mr. Pardeep Kumar Khanna, Chief Financial Officer. Yes, we expect INR600 crores revenue in the fourth quarter, and margin will also increase. On PAT specifically, Abhay Singh added that it would not be appropriate to discuss PAT numbers for the next quarter, but most likely we will be achieving the INR600 crores mark this quarter.
Not answered directly.
32. Q4 FY26 EBITDA margin
Shaikh Mohammad Ayaz, Individual Investor
Question. What is the EBITDA margin expected for Q4?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. Approximately 11%, a little better than that.
33. R&D and patents update
Shaikh Mohammad Ayaz, Individual Investor
Question. What is the R&D update and how many patents do we have?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. It's difficult to talk about specific exact numbers because of fluctuating situations worldwide — prices are moving up and down drastically. We can answer quantity and capacity utilization well; price is something we do not control. We have 3 process patents, not product patents. Kushal Kumar Rana added that all 3 patents are not being worked on commercial basis currently due to commercial equations — vildagliptin and losartan had nitrosamine impurities, and sitagliptin had enzyme usage issues.
Not answered directly.
34. New land product strategy
Hemant, Norasia
Question. For the new land, has the Board decided what products are coming up, and whether it would be from the API division or the Chemical division?
Answer, Mr. Kushal Kumar Rana, Director Works. In R&D, we are working on both segments parallelly. Different teams are working on different products. As and when we get through those products, we will announce appropriately. Abhay Singh added that the model will remain the same — API and chemicals — but product finalization is under development.
Not answered directly.
35. Inventory markdown
Hemant, Norasia
Question. How much is the inventory markdown in the current quarter, and is it mainly from chemical or API inventory value going down?
Answer, Mr. Pardeep Kumar Khanna, Chief Financial Officer. Total inventory is around INR350 crores. Kushal Kumar Rana clarified that API inventory has gone down.
36. Solara ibuprofen plant acquisition
Hemant, Norasia
Question. One of our competitors has initiated consultation for sale of their ibuprofen plant (Solara). Would IOL be interested given the southern India location and customer base?
Answer, Mr. Abhay Raj Singh, Senior Vice President and Company Secretary. Not immediately now. If anything comes up which meets our selection parameters, we can consider it. But as of now we have another land where we are setting up another plant, so that is our priority.
37. Ibuprofen competitive landscape
Hemant, Norasia
Question. How is the ibuprofen scenario shaping up? Market looks very competitive with new players having technological advantages.
Answer, Mr. Rakesh Mahajan, Advisor. Our ibuprofen capacity is running at more than 90%. We are not facing any such situation which you have heard from other peers. Some capacities have closed down — one capacity was closed in the US last year. Ibuprofen has a 3% to 4% global growth rate every year, so there is potential for increase.
38. Non-ibu growth molecules
Vruddhi Vora, SAS Capital
Question. Given the headwinds in the ibuprofen segment, could you elaborate on other molecules in your portfolio demonstrating strong traction?
Answer, Mr. Pardeep Kumar Khanna, Chief Financial Officer. The other molecules with traction are metformin, pantoprazole and clopidogrel.
39. R&D product pipeline
Vruddhi Vora, SAS Capital
Question. Could you elaborate on the product pipeline that R&D is working on? Which therapeutic categories are being prioritized, and what timeline should we expect for commercialization?
Answer, Mr. Kushal Kumar Rana, Director Works. We are working on the same combination mix of generic molecules. The team is working on names of products and timelines. If the molecule is already in the market, we have to create some edge. As and when we get through the idea, we will let you know.
Not answered directly.
40. Closing remarks
Mr. Rakesh Mahajan, IOL Chemicals and Pharmaceuticals Limited
Question. Closing remarks — overall summary
Answer, Mr. Rakesh Mahajan, Advisor. Thank you for joining us. We remain confident in the direction of our business. Progress across segments supported by strong customer relationships, disciplined execution, and improving operating efficiencies gives us confidence in sustaining performance momentum. Continued emphasis on portfolio depth, process improvement, and prudent financial management will remain central to positioning the company through evolving market conditions.
What was said
Topic by topic, in the order it was spoken
Welcome and Disclaimer · Ms. Prachi Ambre (MUFG Investor Relations)
- Introduced management: CFO Pardeep Khanna, SVP & CS Abhay Raj Singh, Director Works Kushal Kumar Rana, and Advisor Rakesh Mahajan
- Standard forward-looking statement disclaimer noting call may contain projections subject to risks
Q3 FY26 Business Overview · Mr. Abhay Raj Singh (SVP & CS)
- Characterized Q3 FY26 as a resilient quarter despite global geopolitical headwinds
- Diversified business model demonstrated consistent operations across product categories
- Strategic focus on expanding regulated markets footprint, high-value and non-ibuprofen API share, R&D, and backward integration
Pharmaceutical Segment Performance · Mr. Abhay Raj Singh (SVP & CS)
- Pharma segment continued to anchor growth as key contributor to overall performance
- Non-ibuprofen API molecules gained traction, market share, and validation from regulated markets
- Growth supported by healthy volumes, customer engagement, and expansion in quality-focused geographies
- Diversification strategy reduces concentration risk and improves margin quality
Chemicals Segment Performance · Mr. Abhay Raj Singh (SVP & CS)
- Chemicals business delivered stable Q3 performance supported by optimal capacity utilization
- Improved demand conditions, operational discipline, and efficiency initiatives supported profitability
- Steady chemicals performance validates portfolio resilience across business cycles
Q3 FY26 Financial Performance · Mr. Pardeep Kumar Khanna (CFO)
- Revenue from operations INR580 cr vs INR523 cr in Q3 FY25, growth of 10.9%
- EBITDA INR62.6 cr vs INR50.9 cr, growth of 22.8%
- PBT before exceptional INR38.8 cr vs INR27.8 cr, growth of 39.3%
- EBITDA margin improved to 10.7% from 9.7%; PBT margin to 6.6% from 5.3%
- Exceptional item of INR11.2 cr recorded as provision relating to new labor law
9M FY26 Financial Performance · Mr. Pardeep Kumar Khanna (CFO)
- 9M revenue INR1,699.6 cr vs INR1,551.4 cr, growth of 9.6%
- 9M EBITDA INR196.1 cr vs INR157.1 cr, growth of 24.8%
- 9M PBT before exceptional INR124.8 cr vs INR93 cr, growth of 34.2%
- 9M EBITDA margin improved to 11.4% from 10%; PBT margin to 7.3% from 5.9%
- Stable financial position supported by healthy operating cash flow and prudent management
Dividend Declaration · Mr. Pardeep Kumar Khanna (CFO)
- Board declared interim dividend of 50% per equity share for FY25-26
- Dividend reflects confidence in company performance and outlook
In their words
Initially we said that we will try to reach to around 14% to 15%, after that we said we will be reaching to around 13%. But I think now we are just understanding that we will be reaching something 11% to 12%. And we are very hopeful that this EBITDA level will be increasing and getting better in the next financial year '27.
Most of the companies, they are opting for this fuel, and that is why this cost fluctuation is very high, either on upper side or on the lower side. So like in Q2, what we said with respect to fuel is there was heavy rains, and this husk remains in the open areas. So we were not in a position to use even our stocks.
Our company, ibuprofen capacity is running at almost more than 90%. So we are not facing any such situation, which you have heard from other peers or other things. Otherwise, the capacities are also closing down in last year, one capacity was closed in U.S.A. also.
To check next time
What management committed to on this call, or the dates they gave.
- Q4 FY26 revenue delivery at ~₹600 cr and EBITDA margin reaching ~11%
- FY27 capex finalization within the ₹150-200 cr band
- Minoxidil final API commercialization launch in Q1 FY27
- Status of new land parcel NHC/NOC approvals and product finalization
- Paracetamol utilization improvement above the current ~60%
- Rice husk fuel cost trajectory and normalization of power/fuel expense
Transcript
We have not transcribed this call's recording. Read the company's transcript (PDF).
The stock after the call
| After the call | Close | Stock | Nifty 50 |
|---|---|---|---|
| Next session Thu 12 Feb 2026 | ₹74.62 | −0.90% | −0.57% |
| 5 sessions Wed 18 Feb 2026 | ₹74.10 | −1.59% | −0.52% |
| 20 sessions Thu 12 Mar 2026 | ₹70.63 | −6.20% | −8.92% |
From the close of Wed 11 Feb 2026, ₹75.30: the close before the call day (the call's time is not on file). Adjusted daily closes; the move includes everything else that happened in those sessions.