India based specialty chemicals company Neogen Chemicals Ltd reported a steady rise in its first quarter earnings and profits driven by strong demand from the domestic sector. The company registered 62% revenues from the domestic market during the quarter. Performance was also supported

by moderate revenue spillover from Q4 FY20 to Q1 FY21. 

 

The company's revenue grew by 19% yoy and stood at Rs.77 crore during the period ended June 30, 2020 as compared to Rs.64.47 crore in the same quarter last year. 

 

Net profit rose by 12% yoy and stood at Rs.6.11 crore as against Rs.5.45 crore previous year. Higher PAT was a result of better operating performance and increased depreciation, inline with new capacities added last year. 

 

Company's revenue from organic chemicals segment grew 36% yoy and stood at Rs.66 crore as agaimst Rs.48 crore last year. However its sales from inorganic chemicals dropped by 33% yoy and stood at Rs.11 crore in the current year versus Rs.16 crore last year.

 

The company incorporated various initiatives to maintain business continuity and the total direct impact of the same resulted in increased expenditure of Rs.63 lakhs in employee benefits expense and Rs.31 lakhs in other expenses. 

 

Commenting on the Q1 FY21 performance, Haridas Kanani, Chairman & Managing Director, Neogen Chemicals said: “We started the fiscal year on a strong note with 19% revenue growth and 12% growth in PAT which came in, inspite of lockdown situation across the country that resulted in loss of significant working hours. This was possible due to our efforts of implementing the business continuity plan to ensure limited disruptions to our operations and seamless connectivity on the digital front. Needless to say, our performance would have been much superior had we not lost days in the month of April 2020 to Covid-19 related lockdowns. Initial constraints with respect to logistical movement and manpower availability have been normalised to an extent, and accordingly all our manufacturing units are now running at optimal utilisation levels, in-line with positive demand from key end-user industries.

 

We are excited with our current growth journey and believe that this is just the beginning. We have promising phase ahead of us as we benefit from the gains arising out of planned expansions in organic chemicals and recently commissioned facility for inorganic chemicals. Overall, the demand landscape continues to be robust backed by customer’s focus of derisking its business and choosing India as one of the preferred suppliers. This is further supported by Neogen’s strong forte in complex and specialised chemistries.”