Neogen Chemicals Cuts FY25, FY26 Revenue Guidance After Dahej Plant Fire

Neogen Chemicals Ltd. has revised its standalone revenue guidance for fiscal 2025 and fiscal 2026 after a fire incident at its Dahej plant. The standalone revenue guidance for fiscal 2025 has been revised in the range of approximately Rs 765-800 crore from Rs 800-825 crore.

Fiscal 2026 revenue guidance stands revised in the range of approximately Rs 775-850 crore from earlier guidance of Rs 950-1,000 crore for standalone business. The company will take further efforts to reinstate the capacity faster and increase capacity at other locations to minimise the impact, according to an exchange filing on Friday.

The accidental fire was contained to the existing operations at a multi-purpose plant or MPP3- facility, tank farms and warehouse at their Dahej plant. "There is extensive damage to the warehouse and entire MPP3 structure, including plant, machinery, and equipment as envisaged based on visual examination. However, given the safety conditions, entry into affected area is not yet commenced," the filing said.

The admin block, quality control, utility block, effluent treatment, interconnecting pipe-racks and some of the bulk storage facility needed to support the manufacturing infrastructure, were not affected by the fire, the company said. The Neogen Ionics facility for manufacturing electrolyte salt and electrolytes was also not affected during the fire.

"Further, fortunately there were no casualty and injury to life. This was possible due to hard work done by our safety team in co-ordination with local hazard management facility and other neighboring plants who extended support to us, which we are very grateful for," the company said.

The reconstruction of the impacted facilities may take around nine to 12 months to reinstate the plant and restart operations, for which planning work has already been initiated, it added.

The loss of assets and business interruption are both adequately covered by insurance, and the surveyor has commenced an assessment of the situation, according to the filing.

The Department of Industrial Safety and Health has issued a stay order on operations at MPP-3, the warehouse and tank farms, which were affected in fire through the correspondence received on March 6, 2025.

Neogen Chemicals' Mahape and Vadodara facilities have been predominantly manufacturing organic chemical products. The Dahej SEZ facility was established in February 2020 for inorganic chemicals and later on the capacity was added to further scale up the production of Organic Chemicals in September 2021.

In the interim, the company will shift production of critical select specialty products to other sites based on approval from customers. "This, combined with the planned expansion in Patancheru plant, will help minimise the impact on earnings going ahead to minimise business disruption. The company has notified all the relevant authorities, as per the filing.