Neogen Chemicals Limited, one of the leading manufacturers of Bromine-based and Lithium-based Specialty Chemicals, has delivered revenue of Rs. 147.9 crore in Q1 FY23, depicting a growth of 75%. 

The strong topline performance was driven by incremental benefits accruing from the expanded capacity and was supported by continued positive demand across key products. The company has been able to leverage its expertise in process chemistries to focus on high-value products with multi-stage processes.

Profit after tax (PAT) stood at Rs. 11.1 crore during the quarter as compared to Rs. 7.4 crore in Q1 FY22. Strong double-digit growth in PAT was aided by good operating performance. In addition, gains from various cost management initiatives aided earnings growth during the quarter under review. Higher depreciation was in-line with new capacities added.

During the period under review, the Company witnessed significant increase in the prices of Lithium raw materials which the company was able to pass on to the customers, resultantly protecting the absolute EBITDA. The EBITDA percentage margin decline is optical as it considers higher revenues and higher RM costs with preserved absolute earnings.

Commenting on the Q1 FY23 performance, Haridas Kanani, Chairman & Managing Director, Neogen Chemicals said, “I am pleased to share that we began FY23 on a positive note with strong all-round performance. Revenues grew by 75%, while EBITDA and PAT improved by 58% and 51% respectively. This is a testament of our superior execution capabilities where products are being scaled up rapidly based on encouraging demand trends. The performance momentum was steered by strong gains from the expanded capacity, and this came in spite of a challenging operating environment marred by high input and utility costs, logistical disruption as well as extreme volatility in exchange rates during the quarter."

"We are entailing several CAPEX initiatives this year to elevate our performance trajectory in the existing business and to participate in the sunrise sector of lithium-ion battery chemicals. These initiatives are underway as per our earlier timelines," commented Kanani.

Overall, discussions with both domestic and international players are advancing as expected, and there is continued interest with robust demand. We have also started submitting samples for technical approvals with several customers. Discussions for approval of Neogen, as a vendor are progressing well although slightly delayed from our original timelines. Based on final approvals, we will align our larger CAPEX plans within lithium-ion battery chemicals space in H2 of the current financial year which will start contributing materially earliest from FY25.

In the CSM/ advanced intermediate business, we have started witnessing traction from other newer sectors which are non-agro and non-pharma and will endeavor to progressively increase the contribution at the Company level. This is in-line with our focus of expanding the portfolio of value added products.

The road ahead appears promising, and Neogen will continue to leverage its expertise and sweat its assets to deliver accelerated performance. This will be anchored by incremental gains coming from scheduled commissioning of key projects in this and next financial year. Overall demand trajectory is very favorable, and we foresee immense opportunities unfolding in the chemicals sector that will help Neogen.”