ADVERTISEMENT

Neogen Chemicals Q3 Results Review - Weakness In Base Business Impacts Growth: IDBI Capital

Funding of Battery Chemicals, a key monitorable.

<div class="paragraphs"><p>Neogen Chemical Ltd. (Source: company website).</p></div>
Neogen Chemical Ltd. (Source: company website).

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

IDBI Capital Report

Neogen Chemicals Ltd.'s delivered subdued financial performance in the quarter. Lower lithium and bromine prices, higher financing and depreciation costs led to lower than expected profitability.

Revenue for Organic chemicals segment declined by 5% YoY while the revenue for the inorganic chemicals segment declined by 30% YoY owing to lower prices of lithium raw material. Traction in the existing business remains below optimum levels.

However, we are sanguine on Neogen Chemicals progress on the battery chemical front with strong capex plans coupled with a top notch technology partner in the form of MUIS.

We lower our profit after tax estimates for FY24/FY25/FY26 by 41%/20%/5%. We maintain our 'Hold' rating on the stock with downward revised target price of Rs 1,385 (Earlier Rs 1,700) and cut target multiple from 50 times to 45 times on FY26 earning per share.

Click on the attachment to read the full report:

IDBI Capital Neogen Chemicals Q3 FY24 Results Review.pdf
Opinion
GSK Pharma Shares Slip To One-Month Low After Profit Tumbles Missing Estimates

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.