Neogen Chemicals Q3FY22 Results: Profit rises 22.91% YoY to Rs 10.46 crore

Neogen Chemicals Limited, a leading manufacturer of Bromine based compounds, Grignard Reagents and Inorganic Lithium Salts, has reported a 22.91 per cent YoY rise in the consolidated profit at Rs 10.46 crore for the third quarter ended December 31, 2021. It had posted a profit of Rs 8.51 crore in the corresponding quarter of the previous fiscal year.

PAT growth was muted due to higher finance costs and depreciation, in line with new capacities added during the year. This will improve once the new plants operate at optimal utilisation levels. Earnings per share for the quarter stood at Rs. 4.49 per share (Rs 3.66 per share in Q3 FY21).

The company's revenue from operations grew 55.77 per cent YoY to Rs 132.64 crore in the reported quarter compared to Rs 85.15 crore posted last year. EBITDA grew 34.67 per cent to Rs 23.81 crore compared to Rs 17.68 crore posted last year.

The strong performance was driven by higher contribution from the recently commissioned phase I & II expansions at Neogen's Dahej site. Both demand and realisation stood favourable, led by higher product off-take across key end-user industries.

Haridas Kanani, Chairman & Managing Director, Neogen Chemicals said, "I am delighted to share that we have demonstrated robust all-round performance during the quarter under review steered by incremental gains from recently commissioned Phase I & II greenfield expansions at SEZ Dahej, Gujarat. Our revenue growth stood at 56 per cent, translating into the highest-ever quarterly revenue run rate of Rs 133 crore. I am particularly happy that we V Anantha Nageswaran takes charge as Chief Economic Advisor reported a strong performance despite a challenging macro environment mirrored by a sudden spike in utility costs, combined with the onset of the Omicron variant."

He further added, ". We successfully raised Rs. 225 crore equity on a preferential allotment basis to support our growth initiatives in advanced intermediates, custom synthesis and contract manufacturing, and lithium-ion battery materials space. The idea is to be future-ready and gain first-mover advantage in some of these high potential opportunities while retaining our balance sheet strength."

The company in a statement said, the new CAPEX of Rs. 35 crore that was announced in Q2FY22 is progressing well. This is being entailed at the Vadodara facility to:

• Manufacture 250 MT of electrolyte for lithium-Ion batteries advanced chemistry cells.
• Streamline processes in the facility.
• Speed up process development and commercialisation of speciality chemicals.
• Undertake overall site development.

Neogen Chemicals is now focusing on a niche and value-added products that require expertise in complex chemistries with multi-stage processes. Its pilot plant initiative of electrolyte manufacturing for lithium-Ion batteries is progressing well and we remain on track to commission that by H1 of FY23. All these initiatives will significantly improve its revenue trajectory over the next few years.

The company said, "The road ahead appears equally exciting for us, and we remain vigilant of growing opportunities in the chemicals and lithium-ion battery materials for EV (electric vehicles) space. We will continue to use our expertise and capabilities to deliver sustainable and profitable performance."