Neogen Chemicals Limited has registered a 20% jump in Q2 FY25 revenue to reach Rs. 193 crore fueled by increased volumes in the core business, coupled with incremental contribution from BuLi Chem.

This was achieved in a challenging operating environment characterized by weak pricing. Softness in Agchem was partially mitigated by a positive demand trend for other end-use applications. Neogen Ionics (Battery Chemicals) recorded initial commercial sales of Lithium Salts and Electrolytes, garnering strong initial customer response. It is well poised to drive substantial growth from the next financial year.

EBITDA stood at Rs. 35 crore, an increase of 33% Y-o-Y. This improvement was a function of higher plant throughput as well as better operational efficiencies. Focus now shifts to sustaining profitability. Margins remained healthy at 17.9% even in a weak pricing environment & start up related cost at Neogen Ionics Limited.

Profit after Tax (PAT) grew by 38% to Rs. 11 crore. Strong operating performance drove robust PAT growth. Increased Capex intensity in Battery Chemicals going ahead is expected to drive higher depreciation and interest costs. Earnings per share (EPS) for Q2 FY25 stood at Rs. 4.15 per share (Rs. 3.17 per share in Q2 FY24).

Commenting on the Q2 FY25 performance, Haridas Kanani, Chairman & Managing Director, Neogen Chemicals said, “We have delivered a strong performance during the period under review amid a challenging backdrop of events marked by soft demand, oversupply situation, geopolitical tensions and inflationary pressures, which have eroded industry’s pricing power and profitability. Our 20% revenue improvement and 38% PAT growth in Q2 FY25 is a testament to our team’s unwavering dedication, adaptability, and ability to navigate challenging market conditions. Volume gains in the base business as well as contributions from BuLi Chem and Neogen Ionics fostered consolidated performance."

"Through Neogen Ionics, we are making deep inroads in the Battery Materials business. Through our collaborative efforts, we have developed and exchanged multiple recipes of Electrolyte & Lithium Salt combinations with our customers. While doing so, we have gained valuable insights into the technological capabilities and market expertise.

“Our pilot production lines are currently manufacturing and shipping commercial trial lots, while the initial commercial production facilities are operational and fulfilling early market demand. Stringent quality standards are being maintained through strict adherence to safety protocols. The construction of our dedicated Greenfield Battery Materials plant in Dahej using MUIS technology license is advancing steadily & remains on expected timelines. We are strategically phasing the commissioning process aligning with Battery capacities coming in India," commented Kanani.

"While we anticipate a potential demand recovery later in FY25, we are committed to investing in our long-term growth strategy to secure our future. In the face of global economic uncertainty, we at Neogen Chemicals are adapting to changing conditions, and remain steadfast in our commitment to growth, innovation, and delivering value to our stakeholders,” added Kanani.