Neogen reports 40% growth in revenue and profit for Q3 FY23

The company registered solid performance trajectory in Q3 FY23, bolstered by 40% Y-o-Y gains in revenue with healthy profitability, where both EBITDA and PAT increased by 27% and 40% Y-o-Y respectively

Neogen Chemicals Limited has reported 40% growth in revenue and profit to reach Rs. 186.3 crore and Rs. 14.7 crore respectively for Q3 FY23. 

In 9M YTD, the company delivered 46% growth in revenues, 32% increase in EBITDA and 23% growth in Profit After Tax (PAT).

In 9M FY23, revenues were at Rs. 482.3 crore, with a growth of 46% Y-o-Y. Growth was strengthened by increased utilization of plants, driven by stable demand from key end-user industries. Efforts to expand the high-margin advanced intermediates and custom synthesis manufacturing business have begun to show positive results.

EBITDA at Rs. 79 crore in 9M FY23 was up 32% in spite of the ongoing inflation in certain raw materials and utilities, strong EBITDA results were achieved through favourable management of product mix. The company experienced an increase in certain costs such as employee expenses, etc., consistent with management's plan to expand the workforce across departments.

The company delivered a healthy EBITDA performance mainly because it was able to pass on the significant cost increase in the prices of Lithium raw materials to customers. As a result, the absolute EBITDA remained protected.

Profit after tax (PAT) stood at Rs. 35.7 crore during 9M FY23, higher by 23% compared to Rs. 29 crore in 9M FY22. The growth in PAT reflected the operational performance, moderately affected by high depreciation associated with new capacity additions and an increase in finance costs due to elevated interest rates.

Commenting on the Q3 & 9M FY23 performance, Haridas Kanani, Chairman & Managing Director, Neogen Chemicals said, “We registered solid performance trajectory in Q3 FY23, bolstered by 40% Y-o-Y gains in revenue with healthy profitability, where both EBITDA and PAT increased by 27% and 40% Y-o-Y respectively. Our performance has been consistent, and we are witnessing accelerated build up in our business based on strong visibility and continued positive demand environment. Our capabilities in chosen chemistries are exceptional and well appreciated by our partner customers. In-line with our focus on high value-addition, we are scaling up revenues across both advanced intermediates and custom synthesis manufacturing as reflected in better profitability trends. This was achieved despite the impact of continued high inflation in some input and utility costs during the period under review."

"Our expansion plans are ambitious, but modular in nature. Our intent is to cement our leadership position in the existing business, while garnering substantial market share in the high potential Lithium-ion battery chemicals space. All the strategic initiatives undertaken this quarter including new Capex announcements and forming a separate entity for battery chemicals business are steps in the right direction to gain early mover advantage, be future ready with capacities meeting demand and strengthening our technological expertise. All this will result in sustained value creation for our stakeholders. With this, I believe we have built a solid foundation for Neogen Chemicals to independently grow and self-sustain both its existing as well as battery chemicals businesses," commented Kanani.

"I am optimistic that these advancements will enable Neogen to achieve a quantum leap in its earnings and demonstrate its manufacturing excellence to customers across the globe. A favourable demand outlook and India's emergence as a favoured manufacturing hub will expand the market size and draw in additional customers along the value chain,” added Kanani.