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ICICI Direct Report
Neogen Chemicals Ltd.'s revenues were above our estimates while Ebitda came in below estimates due to lower gross processing margin.
Reported revenue growth of 30.1% YoY to Rs 203.9 crore, led by higher growth from both organic chemicals Rs 138 crore (up 39% YoY) and inorganic chemicals Rs 66 crore (up 14% YoY).
Neogen Chemicals' gross margins fell 240 basis points YoY to 40.1% while Ebitda margin declined 100 bps YoY to 16%. Absolute Ebitda was up 22% YoY to Rs 32.6 crore. Profit after tax declined 8% YoY to Rs 14.3 crore.
Key triggers for future price performance:
Phase I and Phase II capex at Dahej bodes well for advance intermediates and custom synthesis revenue growth.
Greenfield expansion of electrolyte and specialty lithium salts for dedicated battery materials to aid revenue growth.
The management commitment towards achieving 25-30% growth in revenue and Ebitda levels on the back of volume growth in the legacy business including revenues from recently acquired BuLi chemicals.
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