Once Neogen starts receiving committed volumes for battery chemicals from domestic battery manufacturers such as Ola Electric, Rajesh Exports, Exide, Amara Raja and others we expect the stock price to appreciate further. The company is in advanced stages of discussion with Morita Chemicals of Japan to form a JV for electrolyte salts which will further boost growth prospects.
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IDBI Capital Report
Neogen Chemicals Ltd. delivered a fair financial performance in the quarter. The performance was led by higher volumes across various product categories. Revenue for Organic chemicals segment grew by 7% YoY while the revenue for the inorganic chemicals segment declined by 30% YoY taking into account the lower prices of bromine and lithium in the quarter.
The quarter also saw an exceptional loss of Rs 141 million owing to the fire impact at the MPP plant in Dahej. We are sanguine on the company's progress on the battery chemical front with strong capex plans coupled with a top notch technology partner in the form of MUIS.
We have pruned our estimates owing to the lowering of management revenue guidance owing to the fire impact.
We maintain our Buy rating on the stock with March 2026 target price of Rs 2,871 at 45 times FY28E expected earnings.
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