Neogen Chemicals Ltd Management Discussions

Global Chemical Industry

In 2024, the chemical industry faced multiple challenges, including weak industrial activity, global economic pressures, labour disruptions and persistent supply chain constraints. Geopolitical tensions such as Russia-Ukraine conflict, U.S.- China trade tariffs, new import duties imposed by the US and overcapacity in China are disrupting global supply chains.

With the industrial sector accounting for over 80% of demand for basic and specialty chemicals, the slowdown had a notable impact on overall consumption. Global chemical production is projected to grow by 3.1% year-on-year (YoY) in 2025, as compared to 3.5% growth achieved in 2024.

The Asia-Pacific region was the primary growth driver, expanding by 4.8%, while the Former Soviet Union and the Africa-Middle East region also contributed positively with 3.4% and 2.4% growth, respectively. Europe, with its 1.9% increase, showed signs of recovery from its sharp 8.1% decline in 2023. However, Latin America continued to face difficulties, with output contracting by 0.8%. North America saw marginal growth of 0.2%, but key manufacturing hubs, such as, the Gulf Coast and Midwest provided some support. Among product segments, agricultural chemicals recorded the highest growth. Specialty chemicals, inorganics and other niche products also performed well, while basic chemicals and synthetic materials showed gradual recovery.

Global Chemical Production (in %)

By Country/Region:	2023	2024e	2025f
World Chemicals Output	1.0	3.5	3.1
North America	-0.5	0.2	2.0
Latin America	-0.5	-0.8	1.0
Europe	-8.1	1.9	1.4
Former Soviet Union (FSU)	5.3	3.4	2.8
Africa & Middle East	3.6	2.4	4.2
Asia/Pacific	4.3	4.8	3.7

e = estimate, f= forecast

The global chemical industry is expected to maintain its growth momentum in 2025, with projected expansion of 2.3%, reaching USD 6,324 billion - up from USD 6,182 billion in 2024. As inventory levels stabilise and demand improves across multiple product categories, the industry is likely to continue its recovery trajectory. Growth is anticipated to be more evenly distributed, with expansion expected in 16 of the 20 key end-use sectors.

The Asia-Pacific is likely to remain the primary growth region, while Europe and North America are expected to see continued but moderate improvements. Latin America is projected to experience positive growth and the Africa- Middle East region is expected to accelerate its expansion. Overall, as global economic conditions stabilise, the chemical industry appears well poised for a broader and more sustained recovery in 2025.

Source:

1.https://www.americanchemistry.com/chemistry-in-america/news-trends/blog-post/2024/chemical-production-steady-amid-weak- recovery-in-key-end-use-markets

2.https://www.marketsandmarkets.com/Market-Reports/global-chemical-industry-outlook-89294716.html

3.https://www.americanchemistry.com/chemistry-in-america/news-trends/blog-post/2024/chemical-production-steady-amid-weak- recovery-in-key-end-use-markets

4. https://www2.deloitte.com/us/en/insights/industry/oil-and-gas/chemical-industry-outlook.html

5. American Chemistry Council

Indian Chemical Industry

Indias chemical and petrochemical industry is poised for robust growth, with the market expected to expand from USD 220 billion in 2024 to around USD 300 billion by 2025. As the worlds sixth-largest chemical producer and the third largest in Asia, India exports chemicals to over 175 countries, contributing 15% to its total exports as of October 2024. The total chemical production rose from 33.0 MT in F.Y. 2023-24 to 33.6 MT in F.Y. 2024-25, suggesting a modest 2% YoY improvement primarily driven by the chemicals segment.

Despite its extensive global reach, India continues to import nearly 45% of its petrochemical requirements, underlining the need to strengthen its domestic production capacity. According to CHEMEXILs January 2025 report, India exported chemicals worth USD 1747 billion between April 2024 and January 2025, with a volume of 8.45 million metric tonnes (MMT) - an increase of 4.2% in value and 10.5% in volume year-on-year (YoY). During the same period, chemical imports stood at USD 24.49 billion, totalling 25.41 MMT, witnessing YoY growth of 6.7% in value and 7% in volume, making India as a net importer.

The chemical sector plays an important role in Indias economy, contributing nearly 6% to the national GDP and employing over 5 million people. The demand continued to rise due to population growth, increasing middle-class consumption and a shift toward cleaner energy. Investments worth USD 45 billion are currently underway, with an estimated additional USD 100 billion required to meet the projected future demand. By 2028, Indias total chemical production capacity is expected to increase from 257 million metric tonnes per annum (MMTPA) to 310 MMTPA. With supportive Government policies, global supply chain shifts, an emphasis on sustainability and the development of industrial clusters, India is well-positioned to become a global hub for chemical manufacturing. The industry has the potential to reach USD 1 trillion by 2040.

Indian Specialty Chemical Industry

Indias specialty chemicals sector faced a challenging environment in 2024, marked by weak demand, pricing pressure from rising Chinese imports and soft export performance. The influx of low-cost Chinese products drove down prices eroding profit margins across several segments. On the domestic front, the agrochemical sector continued to face headwinds due to irregular rainfall and high inventory levels, leading to delayed purchases and de-stocking across the supply chain. Globally, subdued demand limited export recovery, adding further pressure on the sector.

While the sector continues to face near-term challenges, the long-term outlook for Indias specialty chemicals market remains positive. Valued at approximately USD 64.5 billion in 2024, the market is projected to grow to USD 92.6 billion by 2033, reflecting a compound annual growth rate (CAGR) of 3.8%. This anticipated growth will be supported by increasing demand across key end-use industries, ongoing product innovation, AI-driven Research & Development and the gradual expansion of domestic manufacturing capacity. Moreover, 3D printing is enabling efficient, customised production of catalysts and packaging.

Indias semiconductor market is projected to grow at a CAGR of 13%, reaching from USD 52 billion in F.Y. 2024-25 to USD 103 billion by 2030. This strong growth is expected to create substantial opportunities for the chemical manufacturing industry, especially in the supply of high-purity chemicals, specialty gases and advanced materials essential for semiconductor production. Government incentives, along with increasing investments in local manufacturing and Research and Development (R&D), are likely to strengthen the domestic supply chain, enabling chemical manufacturers to play a key role in supporting the countrys expanding semiconductor ecosystem.

At the same time, while many companies have moved past the de-stocking phase, the industry continues to face pricing pressures due to weaker-than-expected demand in China. Consequently, suppliers are actively exploring alternative markets both, within the region and beyond China. In this context, the China+1 strategy presents a near-term growth opportunity for Indian specialty chemical manufacturers, as global customers seek to diversify their supply chains and reduce over-reliance on a single geography.

Government Initiatives

The Government has taken some targeted initiatives to promote the Indian chemical industrys sustained growth.

Union Budget for F.Y. 2025-26: Highlights

The Union Budget introduced several policy measures which are expected to influence the chemical industry both, directly and indirectly:

• Personal Income Tax Reforms: Lower personal tax rates and exemptions up to Rs 12 Lakh are likely to boost disposable income and drive consumer spending, indirectly supporting demand in housing, construction and the chemical industry.

• Removal of TCS on Sale of Goods: Eliminating the Tax Collected at Source (TCS) on the sale of goods will ease compliance and improve working capital flow. This change is expected to enhance operational efficiency across the chemical manufacturing value chain.

• Customs Duty Reductions on Key Chemicals: The

Basic Customs Duty (BCD) on chemicals, such as, Aminophylline and Trimethoprim has been reduced from 10% to 75%. This move is expected to lower production costs, strengthen competitiveness and encourage investment and innovation within the sector.

• Phosphoric Acid Imports: Effective May 1, 2025, the BCD on phosphoric acid imports has been reduced from 20% to 75%, aligning rates across all countries, including the U.S., which previously faced a 10% duty. This harmonised rate simplifies the import process, improves cost efficiency for domestic manufacturers and supports a more competitive market environment.

• Production-Linked Incentive (PLI): The Government had approved a PLI Scheme on May 12, 2021, with a total outlay of Rs 18,100 Crore over five years. The scheme aims to establish a competitive domestic Advanced Chemistry Cell (ACC) battery manufacturing capacity of 50 GWh. Complementing this, the National Critical Mineral Mission (NCMM) was launched in January 2025 for a seven-year period, with an allocation of Rs 16,300 Crore. It is expected to attract Rs 18,000 Crore from the public sector and other stakeholders. The mission focuses on building a secure and sustainable supply chain for critical minerals across exploration, mining, processing and recycling.

• Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs): These dedicated zones are designed to attract large-scale investments in the petrochemical industry. With integrated infrastructure and shared services, PCPIRs aim to mobilise Rs 10 Lakh Crore in investments by 2025.

By creating hubs for manufacturing and research, they enhance the sectors ability to meet growing demand while improving global competitiveness.

• Chemical Promotion Development Scheme (CPDS):

This programme supports research, surveys, workshops and seminars to address industry challenges and promote growth. It encourages stronger collaboration between Government, industry, academia and research institutions, imparting innovation and helping the sector stay aligned with changing market needs.

Together, these initiatives are aimed at enhancing production capacity, encouraging sustainable practices and positioning India as a competitive force in the global chemical market. By promoting innovation, reducing import reliance and improving industry collaboration, the budgetary measures are expected to significantly contribute to Indias economic growth through job creation, higher exports and the development of allied industries.

Lithium-ion Battery Market in India

Indias Lithium-ion battery market is undergoing rapid transformation, driven by growing demand across electric vehicles (EVs), consumer electronics and energy storage systems (ESS). The country is set to operationalise over 150 GWh of battery cell manufacturing capacity by 2030, supported by investments exceeding Rs 75,000 Crore from both, public and private sectors. The market is segmented by battery capacity into four brackets :

Batteries with capacities exceeding 60000 mAh are expected to capture over 40% of the market share by 2030, driven by the needs of commercial EVs and large-scale storage solutions. The lithium-ion battery market in India was valued at USD 3.20 billion in 2024.

According to International Market Analysis Research and Consulting Group (IMARC) Group, between 2025 and 2033, the market is projected to grow at a CAGR of 12.3%, reaching USD 9.56 billion. This growth is driven by rising demand from consumer electronics, electric vehicles and renewable energy storage. North India leads the market, supported by advanced manufacturing infrastructure and better access to raw materials. Additionally, Government incentives are playing a key role in accelerating market expansion.

India remains heavily dependent on other Asian countries for sourcing raw materials, mineral processing and key battery components essential for electric vehicle (EV) production. Critical minerals like lithium, vital for manufacturing EV batteries are largely imported, as domestic capabilities in processing and manufacturing Advanced Chemistry Cells (ACCs) are still limited. Most of the current demand is met through imports, leaving room for greater domestic value addition.

Despite these constraints, Indias lithium-ion battery market is expected to reach 11-13 GWh by the end of F.Y. 2024-25 and further expand to 60-65 GWh by F.Y. 2029-30, largely driven by the rapid adoption of EVs and the growing need for stationary energy storage solutions. To address this, several domestic and international companies have announced large-scale investments and strategic partnerships to develop local manufacturing. These collaborations aim to reduce reliance on imports, promote technology transfer and strengthen Indias position in the global battery value chain.

Key Segments Driving the Growth of Indias

Lithium-ion Battery Industry

• Rising Preference for Compact and Mobile Electronic Devices: The Indian smartphone market, valued at USD 38 billion in 2024, is expected to reach USD 81.5 billion by 2033, growing at a CAGR of 8.7%. This growth is driven by rising demand for portable, high-performance devices, driven by evolving lifestyles and mobility needs. As remote work and digital learning become more common, consumers increasingly seek compact gadgets with long battery life and sleek design. These advancements not only support the consumer electronics segment but also contribute to broader clean energy goals.

• Increasing Use of Renewable Energy Sources:

Indias renewable energy market, valued at USD 23.9 billion in 2024, at a CAGR of 8.1%, is expected to reach USD 52.1 billion by 2033 (IMARC Group). As renewable adoption accelerates, the need for efficient energy storage systems (ESS) - spanning grid-scale and residential solutions - has grown substantially, contributing 10-15% of global battery demand. Lithium Iron Phosphate (LFP) batteries dominate this space due to their cost-efficiency and safety benefits. This demand is creating strong upstream linkages to the specialty chemicals and materials sectors, particularly for lithium, iron and phosphate-based compounds, further integrating the lithium-ion battery market into Indias clean energy transition.

• Rising Popularity of Electric Vehicles: The Indian electric vehicle (EV) market is projected to grow at a CAGR of 19.44%, from USD 54.41 billion in 2025 to USD 110.7 billion by 2029. This growth is driven by environmental concerns, Government incentives, such as, tax credits and rebates and advances in battery technology that are improving range, reducing charging times and lowering costs. The ongoing expansion of charging infrastructure is also making EVs more accessible. In response, automakers are widening their EV offerings to meet diverse consumer needs. Together, these factors are accelerating EV adoption, reshaping the automotive industry and reinforcing Indias commitment to sustainable mobility.

Company Overview

Neogen Chemicals Limited (hereafter referred to as Neogen or the Company) is a leading manufacturer of bromine - and lithium-based specialty chemicals with over 35 years of industry experience since its establishment in 1989. With a strong commitment to innovation, Neogen produces over 246 high-quality organic and inorganic chemicals that fuel industries and transform lives. Our diverse portfolio serves as critical intermediates in the pharmaceuticals, agrochemicals, engineering, electronics, polymers, water treatment, construction, aroma chemicals, flavours and fragrances, specialty polymers, vapour absorption chillers, emerging battery material applications and various other industries.

Neogen has earned a strong reputation for quality, reliability and technical expertise. It has also been the largest importer of lithium carbonate and lithium hydroxide in India for the past three decades, backed by robust relationships with leading global lithium miners and processors.

Neogen goes beyond its core product offerings. The Company also specialises in customised synthesis and contract manufacturing services. By utilising its in-house process expertise and client-supplied specifications, Neogen delivers bespoke chemical solutions. Its customer base covers multiple sectors, with increasing contributions from its custom synthesis business.

As part of its growth strategy, Neogen has expanded into lithium-ion battery materials for energy storage systems (ESS) and electric vehicle (EVs) applications, tapping into a rapidly growing market aligned with Indias clean energy transition. For the state-of-the-art battery materials facility, the Company has already acquired land in Gujarat and commenced construction activity.

Additionally, the Company secured a licence from MU Ionic Solutions Corporation to manufacture electrolyte technology in India, increasing its capabilities in next-generation battery materials.

In a significant development, Neogen has expanded its global footprint by incorporating a wholly owned subsidiary in Japan to enhance its proximity to strategic markets and technological collaborations.

Neogens leadership is anchored by technocrat promoters with a collective industry experience of over 60 years, underscoring the Companys continued commitment to innovation, precision and sustainable long-term growth. This experienced leadership, combined with strong R&D capabilities and an agile operating model, positions Neogen as a significant leader in Indias specialty chemicals and energy materials landscape.

Neogens Product Portfolio

Neogen has significantly broadened its product range over the years, drawing on its advanced manufacturing and R&D capabilities. Till date, it has a diverse portfolio that serves multiple industries. These include pharmaceuticals, agrochemical intermediates, engineering fluids, electronic chemicals, polymer additives, water treatment, construction chemicals, aroma chemicals, flavours and fragrances, specialty polymer chemicals and Original Equipment Manufacturers (OEMs). The portfolio is also evolving to support emerging applications such as lithium-ion battery materials for energy storage and Electric Vehicles (EVs). The Company offers more than 246 chemical products, establishing a strong presence across domestic markets and in 33 countries worldwide.

World-Class Manufacturing Capabilities and Expansion

Neogen operates four advanced manufacturing facilities across India. These are located in Mahape (Navi Mumbai), Karakhadi (Vadodara), Dahej SEZ (Gujarat) and Patancheru (Hyderabad) which is spread across a land admeasuring around 2,25,480 m2 and are equipped to support complex, multi-step chemical processes across diverse product categories.

With the completion of brownfield expansion activities and developments, Neogens total reactor capacity has reached 438 m3 for organic chemicals and 39 m3 in tonnage for inorganic chemicals and the organic chemicals capacity at Pantancheru, Hyderabad plant has increased from 120 MT to 300 MT as of F.Y. 2024-25. Neogen continues to strengthen its operations through these state-of-the-art facilities, which support complex multi-step processes and advanced chemistry.

The addition of the Buli Chem plant in Patancheru, Hyderabad has further enhanced its capabilities in custom synthesis and contract manufacturing, helping drive the Companys growth in the pharmaceutical and agrochemical sectors.

Strong Manufacturing Infrastructure

Factory	Land Area	Land Utilisation	Capacity		Certifications of Manufacturing Facilities
			Organic Chemicals (Reactor capacity)	Inorganic Chemicals (Tonnage)
Mahape (Since 1991)	4,045 m2	100%	69 m3	9 m3	ISO 9001:2015 from Bureau Veritas Certification Holding SAS
Vadodara (Since 2017)	161,874 m2	20%	111 m3		ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 certifications from Bureau Veritas Certification Holding SAS
Dahej (Since 2020)*	43,374 m2	Earlier 50%*	Earlier 258 m3*	Earlier 30 m3*	ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 certifications from Bureau Veritas Certification Holding SAS. Also, GMP (Good Manufacturing Practices) certified by SGS
Total	2,09,293 m2		438 m3	39 m3
Patancheru (May 2023)	16,187 m2	50%	300 MTA		ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 certifications from Bureau Veritas

* Following a fire incident at Dahej plant in March 2025, the plant capacity is currently unavailable. However, a replacement plant of the same capacity is currently under construction.

In F.Y. 2024-25, the Company initiated a strategic expansion of its manufacturing footprint to strengthen its position in the lithium-ion battery chemicals segment. Two major facilities have been planned with a combined land area of 2,70,740 m2. The first facility, located in the Dahej Special Economic Zone (SEZ) and spread across 6,455 m2, with an installed capacity of 2,000 metric tonnes (MT) for electrolyte production is fully commissioned and of 2,500 MT for lithium electrolyte salts and additives, the capacity of 200 MTPA is commissioned and the Company has shipped first approved materials to its customers from this facility and for the remaining 200 MTPA trial production is ongoing. Further, an 1,100 MTPA capacity is expected to commission by end of this year and remaining 1,000 MTPA by early next year. The second facility, situated at a new site in Pakhajan within the Dahej Petrochemicals Investment Region (PCPIR), covers 264,285 m2 and is scheduled for commissioning early next year. It will contribute an additional 30,000 MT of electrolyte capacity and 3,000 MT of lithium electrolyte salts and additives capacity. Together, these facilities will provide a total capacity of 32,000 MT for electrolyte and 5,500 MT for lithium electrolyte salts and additives.

NEOGEN IONICS- PROPOSED MANUFACTURING SETUP

Manufacturing locations	Land Area	Capacities
		Electrolyte	Lithium Electrolyte Salts & Additives
Dahej SEZ (transferred from Neogen Chemicals)	6,455 m2	2,000 MT	400 MT
		-	2,100 MT
Pakhajan, Dahej PCPIR (New site)	2,64,285 m2	30,000 MT	3,000 MT
Total	2,70,740 m2	32,000 MT	5,500 MT

• Strengthening Presence in the Lithium-ion Battery Market:

Indias lithium-ion battery sector is expanding rapidly, driven by rising electric vehicle adoption and supportive government policies that emphasise local manufacturing of cells and materials. This surge in demand is expected to create significant opportunities for critical inputs such as electrolytes and lithium salts.

At the global level, the transition to clean energy and electric mobility is accelerating, supported by policies like the U.S. Inflation Reduction Act (IRA), often referred to as the big beautiful bill. While certain provisions of the IRA have evolved, two key incentives remain crucial: subsidies for EV manufacturers and the 45X tax credit, which directly supports battery cell makers by covering around 25%-35% of total manufacturing costs. Importantly, these incentives mandate localisation and a China-free supply chain, reshaping global sourcing strategies.

Neogen is strongly positioned to capitalise on these developments through its focused investments in electrolytes and lithium salts. Its capabilities align closely with the requirements of the 45X framework, enabling the Company to integrate into global supply chains while contributing to Indias ambition of becoming a hub for lithium-ion battery production. Neogen is well-placed to scale its Battery Material business and strengthen its leadership in this emerging sector by addressing both domestic demand growth and international opportunities.

• Focused Capacity Expansion:

Neogen is executing a well-defined capacity expansion strategy - to strengthen its production capabilities across multiple segments.

o For Organic and Inorganic Chemicals: As of

March 2025, the Company has a total installed capacity of 438 m3 for organic chemicals and 39 m3 for inorganic chemicals. The Company has expanded its organic chemicals capacity at the Patancheru facility from 120 MT to 300 MT to support growing demand through debottlenecking initiatives, more than doubling its active production capability. During the year under review, a fire incident at the Dahej facility impacted operations at the MPP-3 unit. Production was temporarily shifted to other approved sites based on customer approvals and a replacement plant has also been constructed at an adjacent location within the same site.

o For Battery Materials: Neogen Chemicals is advancing its Battery Chemicals venture with a planned investment of Rs 1,500 Crore to manufacture Lithium Electrolyte Salts and Electrolytes, which hold strong revenue potential. Of this, Rs 470 Crore was deployed in F.Y. 2024-25. The Company commissioned 200 MTPA of its planned 400 MTPA capacity for Lithium Electrolyte Salts and additives, with the first approved materials shipped to customers. Trial production is underway for the remaining 200 MTPA. Additionally, the Company plans to commission 1,100 MT by end of this year and another 1,000 MT by early next year. In the Electrolytes segment, the 2,000 MT plant at the Dahej facility has been fully commissioned and has started operations in F.Y. 2024-25.

Neogen has a dedicated team to oversee project development and initial production. The Company is actively engaged in discussions with major battery manufacturers to secure long-term supply contracts, as customers seek to diversify their supply chains and reduce reliance on traditional sources. Meanwhile, reduced import duties on critical minerals like lithium are expected to lower electric vehicle battery costs. Battery chemicals account for about 35% of total EV battery expenses. This policy shift reinforces Neogens growth outlook in the battery materials domain.

• Building a Future-Ready Battery Material Business:

The Company undertook key strategic initiatives to strengthen its position in the battery Material space during F.Y. 2024-25. The Company has secured a MUIS license, enabling it to pursue strong global interest in non-Chinese supply chains, with advanced negotiations underway for long-term contracts with leading battery manufacturers. Pilot and commercial batches of electrolyte and lithium salts are already being supplied in F.Y. 2024-25, with customers validating quality and approving facilities. Further, strategic hiring has been nearly completed to build a high-performing team dedicated to the Battery Material business. Early next year, the Company is expected to commission a greenfield facility at Pakhajan with a 30,000 MT electrolyte capacity using MUIS technology and a 3,000 MT lithium electrolyte salts and additives capacity.

• Greenfield Expansion through Neogen Ionics Limited

Established Neogen Ionics in F.Y. 2024-25, has achieved full financial closure for its Rs 1,500 Crore greenfield project, primarily backed by long-term project finance debt. With over Rs 470 Crore already deployed, construction is advancing steadily and commercial production remains on track. The Company is actively engaging with leading battery manufacturers for long- term supply agreements, supported by strong demand visibility.

• Strategic Expansion via Merger and Subsidiary Formation

o BuLi Chem Merger: Buli Chem merged with Neogen effective from January 31,2025, following

NCLT approval, thereby streamlining operations and enhancing synergies. The manufacturing facility of the merged entity is located in Patancheru, Hyderabad. Following the merger, Neogen Chemicals has expanded its portfolio by introducing new lithium-based products, begun exports to the European Union (EU), and by leveraging internal synergies.

o Formation of Neogen Morita New Materials Limited: Neogen Ionics Limited is in advanced discussions with Morita Chemical Industries Co. Limited of Japan to establish a Joint Venture Company (JVC) in India. To facilitate this initiative, Neogen Ionics has incorporated a wholly owned subsidiary on July 30, 2025, with the name Neogen Morita New Materials Limited. The subsidiary will focus on the growing global opportunities in the lithium-ion battery materials space, particularly in electrolyte salts, catering to both Neogens internal requirements and global market demand. This development reflects Neogens commitment to strengthening its clean energy capabilities and positioning itself as a strong player in the global lithium-ion battery ecosystem.

• Expanding Global Footprint

Neogen established Neogen Chemicals Japan Corporation Limited on July 30, 2024, as a wholly owned subsidiary to strengthen its presence in the Japanese market. The new subsidiary will focus on building strategic partnerships with Japanese chemical companies, driving innovation through research and development collaborations and delivering advanced specialty chemical solutions to meet evolving industry needs. It will also play an important role in the fast- growing battery materials segment by supporting Japans clean energy transition in areas such as electric vehicles and energy storage. Through this expansion, Neogen aims to combine its technological expertise with local market insights, positioning itself to drive both growth and sustainability in the global specialty chemicals industry.

• Leveraging Indias Advanced Chemistry Cell (ACC) Ecosystem

The Company is aligning its strategy with the rapid growth of Indias ACC battery manufacturing ecosystem. With one major manufacturer already commencing trial production at a giga-scale and several others expected to follow within the next two years, demand for key raw materials is set to accelerate. The Company is strategically positioning itself by actively pursuing approvals to supply locally sourced electrolyte and lithium salts.

• Enhancing Operational Efficiency and Resilience:

Neogen has consistently demonstrated strong operational efficiency across all its production facilities, effectively managing complex processes while achieving high utilisation rates. The ongoing expansion at the Dahej SEZ, Patancheru and Pakhajan Plant plant highlights Neogens proactive approach to business growth. Furthermore, the implementation of SAP S/4HANA Enterprise Resource Planning (ERP) has enhanced operational efficiency and transparency. Despite challenges posed by significant price fluctuations in lithium-related inputs, the Company successfully managed to pass these cost increases onto its customers. Bulis merger with Neogen will bring additional synergies, given the shared exposure to pharmaceutical and agrochemical clients, the internal use of organolithium at Neogen and byproduct recycling. This integration will also lead to reduced administrative costs and a more streamlined and efficient structure.

• Aligning Employee Success with Long-Term Growth

The Company has launched Pragati - An Employee Growth and Empowerment Program with the objective of aligning employee success with organisational growth. As part of this initiative, the Company introduced the NCL ESOP Scheme 2024, which consists of 2,50,000 stock options representing 0.95% of the share capital. The scheme has been designed to promote a sense of ownership among employees, promote retention and enable wealth creation. On April 1,2025, the Company approved the Tranche-I grant of 36,400 stock options for 41 eligible employees. This initiative is aimed at strengthening a performance-driven culture while ensuring long-term shared growth across the Neogen Pariwar.

• Increased Focus on Pharmaceutical and Custom Manufacturing (CSM) Segments:

Neogen has enhanced its focus on the pharmaceutical and Contract and CSM segments, driven by the rising demand for high-quality, cost-effective products within these industries. This shift is also designed to mitigate the impact of a slowdown in other end-use markets, particularly the agrochemical sector, thereby ensuring a more balanced and resilient business portfolio.

• Commitment to Sustainability and Responsible Growth:

Neogen remains firmly dedicated to environmental sustainability, continuing its long-standing tradition of eco-conscious operations. The Company places a high priority on protecting the environment and well- being of its employees and customers, while also supporting the communities it serves. Driven by a strong commitment to reducing its carbon footprint, Neogen actively participates in and undertakes initiatives that promote environmental projects, preservation of natural resources, promoting education and awareness programmes, women empowerment and rural development projects and responsible corporate citizenship. Throughout the review period, the Company has implemented several proactive measures in line with these sustainability goals.

Financial Performance Standalone

In F.Y. 2024-25, Neogen operated in a challenging environment impacted by cheap imports, oversupply-led weak pricing, geopolitical and logistical disruptions, sluggish global demand and the temporary suspension of operations at Dahej plant due to a fire incident. Despite these global challenges, the Company demonstrated resilience by leveraging its agile business model and strong manufacturing capabilities. Standalone revenue rose to Rs 773.7 Crore, reflecting a 10% growth over the previous year, driven by onboarding of new customer, an optimised product mix and our ability to swiftly adapt to a challenging environment by strategically pivoting towards product applications that had favorable demand.

EBITDA increased by 27% to Rs 1471 Crore due to growth stemmed from operating leverage achieved through higher volumes, further bolstered by cost optimisation initiatives. EBITDA margin also grew by 240 basis points to 19.0% in F.Y. 2024-25, compared to 16.6% in F.Y. 2023-24. Profits after tax increased by 18% to Rs 48.4 Crore, reflecting strong operational performance. This growth was achieved despite an Exceptional Item of Rs 13.6 Crore (Standalone) and Rs 14.1 Crore (Consolidated) on account of damage to certain property, plant & equipment, inventory and estimated cost of incidental charges due to fire incident at the Dahej plant.

Neogens net worth grew to Rs 808.9 Crore as of March 31, 2025, up from Rs 766.1 Crore the previous year. During the review period, net fixed assets remained at Rs 1978 Crore, while cash and cash equivalents decreased to Rs 0.5 Crore from Rs 2.0 Crore in F.Y. 2023-24.

Consolidated

Neogen delivered a strong financial performance for the year ended March 31, 2025. Neogen reported revenues of Rs 7776 Crore in F.Y. 2024-25, registering a 13% year-on- year growth compared to Rs 690.7 Crore in F.Y. 2023-24. This growth was driven by healthy volumes in the base business, including BuLi Chems operations and additional contributions from Neogen Ionics. This performance was achieved despite soft pricing across product categories, weak global demand and the temporary suspension of operations at Dahej Plant due to a fire incident. Neogen Ionics recorded revenue of Rs 12 Crore in F.Y. 2024-25, which was partly impacted by the fire that led to the loss of finished goods.

EBITDA for the year stood at Rs 136.3 Crore, with an increase of 24% from Rs 110.1 Crore in the previous year.

The growth in EBITDA was supported by operating leverage from higher volumes and cost optimisation efforts. The Company maintained its operating EBITDA, resulting in a remarkable 160 basis points increase in EBITDA margin to 175% for F.Y. 2024-25.

Profit after tax (PAT) was Rs 34.8 Crore. The PAT was impacted by an Exceptional Item of Rs 14.1 Crore, related to damage to property, plant and equipment, inventory and other incidental costs arising from the Dahej plant fire. Earnings per share (EPS) came in at Rs 13.2, compared to Rs 13.9 in F.Y. 2023-24, reflecting the impact of the fire- related losses. The Board of Directors has recommended a final dividend of Rs 1.0 per equity share for F.Y. 2024-25, subject to shareholder approval.

Financial Ratios at a Glance (Standalone)

Key Ratios	Numerator/Denominator	F.Y. 2024-25	F.Y. 2023-24	% Change
Operating Profit ( in Crore)	EBITDA + Other Income	156.89	124.28	26%
Operating Profit Margins (in %)	Operating profit / Revenue from operation	20.28	1772	14%
PAT ( in Crore)	PBT-Tax (% on PBT)	48.41	41.13	18%
PAT Margins (in %)	PAT / Revenue from Operations	6.26	5.86	7%
Current Ratio	Current Asset / Current Liability	1.51	1.79	(16%)
Inventory Turnover	Revenue from operation / Average Inventory	2.25	1.84	22%
Debt-to-Equity Level	(Long term Debt + Short Term Borrowings) / (Equity Share Capital + Other Equity)	0.55	0.51	8%
Interest Coverage Ratio	EBIT / Finance cost	2.56	2.42	6%
Debtors Turnover Ratio	Revenue from Operations / Average Debtors	3.21	3.05	5%
Return on Net Worth (in %)	PAT / (Equity Share Capital + Other Equity)	5.98	5.37	11%

• Reason for more than 25% change - Increase in operating profit mainly pertains to increase in revenue and better operational efficiency.

Outlook

Neogen is committed to reinforcing its leadership in the chemical industry through an expanded product portfolio and intensified research and development initiatives. The Companys strategic focus on improving operational efficiency, broadening its product range and adapting to evolving market demands positions it for continued growth. Neogen is well- placed to drive expansion in both, domestic and international markets, with strong manufacturing capabilities and expertise in complex chemical processes.

The Governments Make in India initiative serves as the overarching theme, with schemes such as the PLI programme expected to add further momentum, especially in pharmaceutical intermediates and lithium-ion batteries. These align with Neogens vision of emerging as a key player in the electric vehicle and renewable energy storage sectors. By maintaining a commitment to high-quality production and reliable supply chains, the Company aims to establish itself as Indias leading supplier of electrolytes for EV applications.

Neogen is also expanding its presence in advanced intermediates, custom synthesis and manufacturing, capitalising on its established customer base and technical expertise. The Companys global distribution network will continue to support export growth, while the recent integration of BuLi Chem with Neogen is set to promote customer acquisition efforts and meet the rising demand for N-Butyl lithium.

Going forward, the Companys strategic expansion in the lithium-ion battery materials and chemicals sector will serve as a major growth driver. The newly incorporated subsidiary Neogen Ionics projects, including its lithium salts and electrolyte initiatives, are on track benefitting from Indias rapidly evolving battery manufacturing ecosystem. Government support for EV adoption and policy measures to reduce production costs, including tax exemptions for lithium products, are expected to further accelerate its growth in this area.

Neogen remains focussed on long-term strategic growth, leveraging market opportunities and its agile business model to deliver sustained value. The Company is well-equipped to navigate market fluctuations and drive sustained value creation in the coming years.

Research and Development

Neogen is committed to delivering consistent product quality by conducting thorough quality tests to ensure that all products meet high standards and customer expectations. Its manufacturing facilities follow all relevant regulations and certifications, with quality control systems carefully monitoring each step of the production process. Equipped with advanced analytical instruments, Neogens quality control laboratories support accurate testing and help maintain reliable performance. The Companys facilities have been approved by several domestic and international customers, reflecting their confidence in Neogens quality standards.

Meanwhile, innovation remains a cornerstone of Neogens growth strategy. The Company operates - two advanced R&D centres located in Mahape and Vadodara which are dedicated to developing new processes and improving existing technologies. Neogen has a 103-member dedicated R&D team, including 10 Ph.D. holders, bringing together deep expertise and innovation capabilities to drive advanced research and product development. To support future growth, Neogen continues to strengthen its R&D capabilities, recognising the key role of research and development in driving progress and staying competitive.

Human Resource (HR) Development

Neogens human resource approach focusses on transparency, fairness and consistency, with continuous efforts to improve talent development, skill enhancement and performance. These practices support the Company in attracting, retaining and engaging the right talent aligning with its long-term strategic goals. Neogen aims to create a workplace where employees are encouraged to take on challenges and maintain a positive, proactive mindset.

By building a supportive and performance-driven environment, the Company empowers its people to excel and contribute to higher standards in quality, efficiency and customer satisfaction. In F.Y. 2024-25, 382 employees were trained, with 99% receiving health and safety training and 63% skill upgradation, while 274 workers were trained, with 100% receiving health and safety training and 79% on skill upgradation. Neogen also allocated 0.93% of its total revenue towards employee well-being in F.Y. 2024-25 and complemented this with several engagement and inclusivity initiatives. These included participation in the Tata Marathon, Safety Week celebrations at all sites, weekend getaways for employees in Thane and Mahape and the Neogen Premier League cricket tournament at Karakhadi and Dahej plants. Such initiatives underscore the Companys commitment to strengthening employee morale, health and team spirit beyond financial support.

Environment, Health and Safety (EHS)

Neogen integrates principles of responsible chemistry and environmental stewardship throughout its operations. The Company remains dedicated to advancing community welfare and ecological sustainability alongside its business expansion.

During F.Y. 2024-25, A fire incident took place at the Companys Multi-Purpose Plant (MPP3), warehouse and tank farms, located at the Dahej SEZ facility in the early hours of March 5, 2025. Due to timely and proactive action by the supervisory staff, the fire was controlled from spreading to other plants in the vicinity and fortunately, there were no casualty and injury to life. Based on the interim assessment conducted by the appointed surveyors, the Company has received an initial on account payment from the insurance provider towards the loss of property, plant and equipment. The final settlement amount will be determined in subsequent stages, following a comprehensive evaluation of the overall asset damage, losses arising from business interruption and the reinstatement value of the affected assets.

The Production and Operation of the Multi-Purpose Plant (MPP3) facility, warehouse and tank farms remained temporarily suspended following the fire incident. Reconstruction is expected to take 9-12 months, with planning and construction work already underway. Meanwhile, production of key specialty products has been shifted to other approved sites and the upcoming Patancheru plant expansion will help mitigate business disruption and earnings impact.

The Company continues to uphold a strong safety culture, focused on eliminating incidents and injuries by ensuring a safe working environment. The focus on safety includes not only its employees but also contractors, consumers and surrounding communities. This is achieved through comprehensive training programmes, behaviour-focused initiatives and incident tracking systems. Safety performance is closely tracked, with swift corrective actions taken to prevent the recurrence of mishaps, if any. Waste is managed through eco-compliant methods, including regulated landfilling and approved incineration. Its effluent treatment facilities use a mix of chemical, biological and disinfection techniques to ensure effective wastewater management. In F.Y. 2024-25, the Company enhanced renewable energy usage, achieved Zero Liquid Discharge at its Dahej SEZ plant and continued third-party monitoring of air and water quality, reinforcing Neogens commitment to reducing its environmental footprint and conserving natural resources.

Quality Control and Assurance

Neogen prioritises strict quality control and assurance practices throughout its operations to ensure product consistency, safety and regulatory compliance. A specialised team of 76 professionals oversees critical functions including documentation, data management, product inspections and audits, ensuring the Neogen Group, including all its facilities, consistently meets high quality standards. Its advanced quality control labs are equipped with modern analytical tools, such as, gas chromatography (GC), high-performance liquid chromatography (HPLC) and ultraviolet spectrophotometers, among others, to support thorough testing procedures at every stage.

The Karakhadi facility in Vadodara is certified under ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018, reflecting its dedication to quality, environmental stewardship and workplace safety. Similarly, the Mahape facility in Navi Mumbai maintains ISO 9001:2015 certification for its strong quality management framework. The Dahej SEZ and Patancheru, Hyderabad locations also hold ISO 9001:2015,

ISO 14001:2015 and ISO 45001:2018 certifications, issued by Bureau Veritas Certification Holding SAS, in addition to GMP certification from SGS.

Neogens documentation procedures are aligned with ICH- Q7A guidelines for intermediates, ensuring full compliance with global standards. A robust quality management system has been established at all manufacturing units for Key Starting Materials (KSM) and Intermediates. The quality assurance team monitors every stage of the production cycle from raw material inspection to final product evaluation prior to packaging. Shipments are approved only after rigorous testing, based on either client-defined or internal specifications reinforcing Neogens commitment to delivering consistently high product quality and ensuring customer satisfaction.

Internal Control Structure

Neogen adheres to recognised financial and accounting standards as directed by its management team. It has a strong internal audit system and clear risk management practices at both corporate and plant levels to ensure transparency and integrity in its financial operations. The Audit Committee reviews quarterly reports from an Independent Internal Auditor, prepared under a risk-based audit plan and these are further reviewed by the Statutory Auditors.

The Company has put in place internal controls over financial reporting that suit its size and operations. These controls help improve efficiency, protect assets, reduce the risk of misconduct and ensure accurate and complete financial records. They also support timely and reliable financial reporting and consistent application of Company policies. During the evaluation for F.Y. 2024-25, auditors found no material weaknesses or major issues in the internal financial control systems, reflecting Neogens strong focus on financial discipline and accountability.

Risk Management Framework

At Neogen, risk management is a core element of strategic planning, crucial for navigating the challenges of the global chemical industry. The Company follows a structured, comprehensive approach to risk management, focused on proactively identifying potential risks and formulating targeted mitigation plans. Each plan is assigned to designated individuals along with clear timelines, promoting accountability and enabling effective progress tracking. Neogen regularly evaluates the success of these measures through ongoing monitoring and review. The overarching aim of this framework is to reduce the impact of identified risks and enable swift, effective responses, enhancing the Companys resilience amid uncertainty.

Business Risk:	Mitigation:
Neogen is exposed to risks arising from global uncertainties such as pandemics, geopolitical disruptions, natural calamities, economic downturns and policy changes in key markets. These factors can disrupt supply chains, financing, logistics and workforce availability.	To mitigate these risks, the Company has adopted precautionary measures such as diversifying into stable geographies, focusing on long-term planning, seeking strong legal counsel and adopting competitive strategies. Vendor diversification, optimal inventory management and a robust supply chain network further reduce exposure. The Company monitors these risks through event-based reviews during disruptions, quarterly assessments of economic policies and regular vendor audits to ensure early identification of potential issues.
Market and Competitive Risks:	Mitigation:
The Company operates in a highly competitive environment and faces risks such as product obsolescence, intense global competition, price volatility and reliance on limited markets. These factors may result in loss of sales, reduced profitability, or weakened market position.	Neogen focuses on innovation, product diversification, R&D, customer engagement and competitive pricing strategies. Expansion into new geographies and certifications to access global markets also strengthen its positioning. The Company\u2019s monitoring mechanisms include weekly sales reviews, regular feedback from customers and ongoing market price surveys to track competitive trends.
Environment, Health and Safety Risk (EHS):	Mitigation:
	The Company\u2019s mitigation measures include stringent safety protocols, employee training, fire safety systems, regular mock drills, effluent monitoring and sustainable practices such as waste management and renewable energy adoption. Employee-friendly HR policies and strong labour relations also reduce workforce-related risks. The Company monitors these areas through daily effluent checks, quarterly safety audits, routine mock drills and employee engagement surveys to ensure compliance and preparedness.
EHS risk refers to potential environmental, health and safety issues that may result from the Company\u2019s operational activities. The business is exposed to risks related to fire, accidents, effluent discharge deviations, environmental non-compliance and labour-related issues. Such risks could affect human safety, the environment, regulatory approvals and the Company\u2019s reputation.
Financial Risk:	Mitigation:
Financial risks include liquidity constraints, foreign exchange fluctuations, inadequate insurance coverage and inaccuracies in financial reporting, all of which may impact profitability and stability.	To manage these risks, Neogen ensures diversified financing sources, maintains robust working capital controls, adopts forex hedging, secures adequate insurance coverage and follows strict compliance with IND Accounting Standards (AS). Monitoring is done through monthly financial closures, weekly cash flow forecasts, insurance Management Information System (MIS) tracking and regular reviews by top management.
Information Technology (IT) Risk:	Mitigation:
The Company is exposed to cyber threats, data breaches, system outages and the risk of using obsolete technology, all of which could disrupt operations and compromise confidential information.	Neogen\u2019s mitigation strategies include implementing IT access policies, using licensed software, deploying firewalls, ensuring Virtual Private Network (VPN) and encryption security and maintaining strong data backup systems. Regular staff training on cyber awareness further strengthens preparedness. These risks are monitored through monthly reviews of access logs, quarterly audits of user roles, firewall monitoring and periodic external IT security reviews.
Regulatory Risk:	Mitigation:
Regulatory risk for Neogen may arise from failure to comply with regulations, violations of contractual obligations, or infringements on intellectual property rights, which could result in legal action and harm to the Companys reputation.	The Company receives professional legal guidance and maintains strong compliance systems to remain aligned with evolving regulatory requirements and international standards. It engages proactively with Indian regulatory authorities and global clients, while mitigating risks through a structured compliance management system, detailed Standard Operating Procedures (SOPs), thorough contract vetting and consultation with external legal experts when required. Monitoring is ensured through weekly compliance checklists, regular tracking of litigations and timely reminders to relevant departments for adherence.
R&D and Innovation Risks:	Mitigation:
Insufficient investment in Neogen\u2019s processes, technology and R&D efforts could negatively affect the Company\u2019s financial performance.	Neogen\u2019s key strength lies in its technological innovation. With advanced research and development facilities in Mahape, Navi Mumbai, Maharashtra and Karakhadi, Vadodara, the Company is at the forefront of cutting-edge developments. Its skilled and dynamic R&D team has been instrumental in driving progress. Since launching dedicated R&D units in 2001, Neogen has significantly expanded its product portfolio, growing from 20 products in 2001 to 246 by F.Y. 2024-25, reflecting the strength of its R&D capabilities. Neogen is committed to further enhancing and expanding its research and development efforts.
Forex Risk:	Mitigation:
Around 28% of Neogen\u2019s revenue is derived from exports, making the Company vulnerable to exchange rate fluctuations and the potential for financial loss.	Neogen has carefully developed a foreign exchange strategy to mitigate exchange rate risk through targeted hedging measures. The Company applies a netting strategy to efficiently manage its foreign exchange exposure.
Risk Associated to Sourcing of Lithium:	Mitigation:
	Neogen has built a stable supply chain through over three decades of collaboration with two of the world\u2019s largest lithium mining companies. To further reduce risks, the Company has diversified its supplier base by adding 2-3 more global lithium suppliers, ensuring a reliable supply. To protect its profit margins, Neogen passes on the fluctuating costs of lithium to its customers. Additionally, the Company enters into long-term agreements that tie the prices of final goods to lithium market prices over extended periods.
The increasing adoption of electric vehicles is expected to lead to a substantial rise in demand for lithium-ion batteries. However, this growth will also bring about new supply chain risks, particularly regarding both raw and refined battery materials, along with greater fluctuations in lithium prices. These price variations could drive up the Company\u2019s costs, potentially affecting its profitability.
Input Price Risk:	Mitigation:
Neogen occasionally encounters challenges related to insufficient raw material supplies and price fluctuations, mainly driven by the significant volatility in the chemical intermediates market. As these intermediates play a key role in the chemical process, any price variations can directly affect the cost of the final products.	Neogen\u2019s procurement team is crucial in managing risks related to raw material supplies and price fluctuations. They ensure that a significant portion of the Company\u2019s key materials is sourced from multiple suppliers across different regions. Additionally, Neogen encourage strong, long-term relationships with its suppliers, allowing the Company to secure cost-effective raw materials and maintain adequate inventory levels to effectively address these challenges.

Caution Statement

Certain statements in the management discussion and analysis may be forward-looking in nature within the meaning of applicable securities law and regulations. These statements refer to Neogens growth strategy, financial results, product potential and development program based on certain assumptions and expectations of future events. Actual results may materially differ from those projected or implied. Neogen assumes no responsibility to publicly amend, modify, or revise any such forward- looking statements based on subsequent developments, information, of events.