- 16 May 2022
- ICICIdirect Research
NEOGEN CHEMICAL REPORTS STRONG TOPLINE GROWTH
NEOGEN - 2096 Change: 32.60 (1.58 %)News: Neogen Chemicals reported topline growth of 69.2% YoY to |156.8 crore against our expectations of | 153.8 crore, led by higher growth in the organic chemical segment (+38% YoY) due to better utilisation of recently commissioned Phase 1 & 2 capacities at Dahej. The revenue from inorganic chemical segment was up 176% YoY to | 58 crore. OPM for the quarter fell 300 bps YoY to 17%, impacted by higher RMAT cost (+72% YoY), leading to EBITDA growth of 44% YoY to | 26.6 crore vs. our estimate of | 28.7 crore. PAT was up 68% YoY to | 15.6 crore against our estimate of | 12.2 crore, driven by lower taxes (16.6% vs. 30% in Q4FY21)
Views: Since the company has commissioned both phase 1 and 2 capacity at Dahej, we expect it to report strong growth in the CRAMS and advance bromide intermediates in the coming time. This should augur well for operational growth. Further, foray into lithium electrolyte is likely to offer strong revenue visibility in the long run. We expect Neogen’s management capability can assist company to gain meaningful market share in lithium electrolyte in long run and thereby support business performance. The company has announced incremental capex of | 150 crore, which should support growth beyond FY24E
Impact: Positive