Neogen Chemicals Limited — Investor Meet, 21-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Neogen Chemicals reported a strong Q2 FY25 performance with consolidated revenues of ₹193 crore, reflecting a 20% year-over-year increase. EBITDA rose by 33% to ₹35 crore, resulting in healthy margins of 17.9%, up 180 basis points. Net profit was ₹11 crore, marking a 30% increase. Segment-wise, organic chemicals saw revenues grow by 34%, while inorganic chemicals faced a 24% decline due to falling lithium prices.

**Future Outlook and Growth Drivers:** Management highlighted a focus on enhancing production capacity, especially in lithium electrolytes and salts, with expectations for increased volumes in Q3 and Q4. The company is also optimistic about India’s expanding EV market, anticipating significant demand for locally sourced electrolytes.

**Order Book and Operational Updates:** The company is progressing with multiple expansion projects, including a new 400 MTPA capacity for lithium electrolytes and a 2000 MTPA plant in Dahej, both expected to start generating revenue in FY25. Strong interest is noted from domestic and international clients, validating Neogen's market position.

**Analyst Q&A Insights:** Analysts sought clarity on revenue projections and capital expenditure plans. Management indicated that capital outlays are in line with projections for FY25, with expectations of approximately ₹700-750 crore total CAPEX. Comparisons to prior quarters revealed challenges in the agrochemical sector, but optimism remained regarding the battery materials segment.

**Market or Regulatory Updates:** No significant regulatory updates were discussed, though geopolitical concerns and economic pressures were acknowledged as ongoing hurdles impacting pricing and profitability.

**Strategic Focus Areas:** The management remains committed to innovation and maintaining high-quality standards to navigate market challenges, with a strategic emphasis on capacity expansion and cost efficiency.

**Investor Insight:** Overall, Neogen Chemicals exhibits promising growth potential with solid financial health and strategic plans in place. The prospects for the upcoming financial periods suggest a 'buy' position, given the anticipated ramp-up in demand for battery materials and ongoing expansion initiatives.