Neogen Chemicals delivers highest-ever quarterly revenue of Rs133cr in Q3 on robust all-round performance

31 Jan 2022 , 10:04 AM

Neogen Chemicals Limited (Neogen) reported strong performance during the quarter and nine months ended December 31, 2021. Revenues in Q3FY22 increased by 56% to Rs132.6cr, as compared to Rs85.2cr in the corresponding quarter last year.

The strong performance was driven by higher contribution from the recently commissioned phase I & II expansions at Neogen’s Dahej site. Both demand and realization stood favourable, led by higher product off-take across key end-user industries, the company said in a filing on Saturday.

Profit after tax (PAT) stood at Rs10.5cr during the quarter as compared to Rs8.5cr in Q3FY21. PAT growth was muted due to higher finance costs and depreciation, in line with new capacities added during the year. This will improve once the new plants operate at optimal utilization levels. Earnings per share for the quarter stood at Rs4.49 per share (Rs3.66 per share in Q3FY21).

At around 10.07 am, Neogen Chemicals Ltd was trading at Rs1,663 per share down by Rs28.15 or 1.66% from its previous closing of Rs1,691.15 per share on the BSE.

Haridas Kanani, Chairman & Managing Director, Neogen Chemicals said: “I am delighted to share that we have demonstrated robust all-round performance during the quarter under review steered by incremental gains from recently commissioned Phase I & II greenfield expansions at SEZ Dahej, Gujarat. Our revenue growth stood at 56%, translating into highest-ever quarterly revenue run rate of Rs133cr. I am particularly happy that we reported a strong performance despite a challenging macro environment mirrored by sudden spike in utility costs, combined with onset of Omicron variant.”

He added, “I am also happy to share another key development. We successfully raised Rs225cr equity on preferential allotment basis to support our growth initiatives in advanced intermediates, custom synthesis and contract manufacturing, and lithium-ion battery materials space. The idea is to be future ready and gain first mover advantage in some of these high potential opportunities, while retaining our balance sheet strength

Post commercialisation of Phase I&II projects, we are now running our Mahape and Vadodara plants at high utilisation levels, while Dahej SEZ plant isramping up. As envisaged, we are now focusing on niche and value-added productsthat require expertise in complex chemistries with multi-stage processes. Our pilot plant initiative of electrolyte manufacturing for Lithium-Ion batteries is progressing well and we remain on track to commission that by H1 of FY23.”

Key developments & updates
Raised Rs225cr through the issuance of up to 16,04,710 equity shares on preferential allotment basis at an issue price of Rs1,402.12 per equity share:

• Some of the high-quality, marquee institutional investors that participated include SBI MF, Axis MF, Plutus Wealth Management LLP and White Oak Capital
• Objective of the fund raise is to support company’s growth momentum and capitalise on the upcoming high-potential opportunities across advanced intermediates, custom synthesis and contract manufacturing and lithium-ion battery materials space

New CAPEX of Rs35cr that was announced in Q2FY22 is progressing well. This is being entailed at the Vadodara facility to:

• Manufacture 250 MT of electrolyte for Lithium-Ion batteries advanced chemistry cells
• Streamline processes in the facility
• Speed up process development and commercialisation of specialty chemicals
• Undertake overall site development