Neogen Chemicals Q1 Results Review - Long-Term Growth Remains Intact: IDBI Capital

IDBI Capital Report

Neogen Chemicals Ltd. delivered subdued financial performance in the quarter. Lower lithium prices, higher financing and depreciation costs led to lower than expected profitability.

Neogen Chemicals' revenue for organic chemicals segment grew by 35% YoY while the revenue for the inorganic chemicals segment declined by 25% YoY owing to lower prices of lithium raw material.

Healthy growth in volumes and realisation led to growth in the organic chemicals segment.

Growth in the custom synthetic manufacturing segment is also progressing well in the sub-segments of flavors/ fragrances and agrochemicals.

Growth trajectory is set to accelerate once the entire planned capex comes on stream. We maintain our 'Hold' rating on the stock on account of rich valuations.

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