Neogen Chemicals Limited (Neogen) reported its financial performance during the quarter ended 30th September, 2023. In Q2 FY24, revenue was Rs. 161.7 crore, with a growth of 9% YoY. This was achieved despite the challenging external environment aggravated by global inventory destocking, slowdown in key export markets and geopolitical uncertainties among others.

Recent capacity expansions, stable demand and contributions from BuLi Chem supported the growth momentum.

EBITDA at Rs. 25.9 crore was higher by 7% YoY. Growth in profitability was reflected by improved product mix and reduction in key input and RM costs. Profit after tax (PAT) stood at Rs. 7.9 crore, lower by 20% YoY compared to Rs. 9.9 crore in Q2 FY23.

PAT was lower due to higher finance costs and depreciation related to ongoing CAPEX initiatives undertaken by the company. Strategic debt repayment from recent preference share proceeds will help lower the finance expenses in the near term. Earnings per share (EPS) for Q2 FY24 stood at Rs. 3.17 per share (Rs. 3.95 per share in Q2 FY23).

Commenting on the Q2 FY24 performance, Haridas Kanani, Chairman & Managing Director, Neogen Chemicals said: “I am pleased to share that we have maintained a consistent performance despite persistent external headwinds that have adversely impacted the end-user demand. We achieved a 9% growth in revenues along with 7% improvement in EBITDA on a Y-o-Y basis. Positive contributions from recently acquired BuLi Chem, rationalisation of key RM & input costs, along with efficient inventory management were notable drivers of performance during th quarter.

“In a significant development, we recently raised ~Rs. 253 crore through preferential allotment to leading institutional investors. I would like to express my appreciation for the trust placed in us and the support extended towards our future growth endeavors. We will carefully deploy these funds to establish a strong presence in the Battery Materials space while sustaining the growth momentum in the existing business.

“We are rapidly progressing along the outlined growth path. BuLi Chem has started contributing and also achieved break-even. This will further ramp up as we move along. The contribution from value-added products is also increasing, and our endeavor is to add more complex products by leveraging our R&D expertise and manufacturing capabilities. Our efforts related to Battery Materials are advancing successfully. Our project using MUIS technology is evolving positively, and we are on schedule to finalize the design work by the end of this year. Our interactions with key customers for both Lithium Electrolyte Salts and Electrolyte are making good progress, and we are seeing strong interest from international customers, especially for Electrolyte Salts. We are confident of garnering a significant shar as the transition to EVs gain momentum.

“Overall, we are well poised to capitalize on the upcoming opportunities. Building upon the solid foundation, we remain steadfast in our pursuit to not only elevate our performance momentum but also consistently enhance value for our stakeholders.”