Neogen Chemicals Q4 Results Review - Structurally Positive On Battery Chemicals Opportunity: Nirmal Bang

Nirmal Bang Report

Neogen Chemical Ltd.’s Q4 FY24 performance came well ahead of our and consensus estimates on sequential ramp up in volume in the existing business and as a result of operating leverage coupled with cost rationalization measures.

The commentary on battery chemicals was optimistic on both salts and electrolyte formulation business. We are building in battery chemicals revenue of Rs 3.3 billion in FY26 with stable pricing, higher than prior estimates.

While we remain structurally positive on the battery chemicals business, near-term uncertainties related to existing business demand recovery, working capital concerns and stretched balance sheet could offer a better entry point, in our view.

Maintain ACC with a revised target price of Rs 1,550 (50 times price-to-earning FY26E).

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