Neogen Chemicals posts 11% revenue growth in Q1 FY24 amidst global challenges

Neogen Chemicals Limited has reported a promising financial performance for the quarter ending 30th June 2023, marking an 11% YoY growth in revenue which stood at Rs. 164.9 crore. The earnings report revealed EBITDA figures at Rs. 28.1 crore, showcasing a 14% YoY growth.

Revenue Growth Amidst External Pressures

Despite global challenges, including inventory destocking and market slowdowns in the EU and other regions, Neogen Chemicals’ increase in revenue is attributed to brownfield expansion that added new capacities in Organic and Inorganic Chemicals. Additionally, BuLi Chem, under Neogen’s management, began its commercial production in Q1 FY24, which added to the sales. Neogen Ionics Limited also made its debut in commercial sales of Electrolyte in both domestic and international markets.

Factors Impacting Profitability

While EBITDA experienced growth, the Profit After Tax (PAT) of Rs. 9.8 crore revealed a decrease by 12% YoY. Factors like high finance costs, expansion costs, and expenses related to the restart of BuLi Chem facility affected the PAT figures. The Earnings Per Share (EPS) for the quarter was Rs. 3.92, compared to Rs. 4.45 in Q1 FY23.

Chairman’s Comments on the Performance

Haridas Kanani, Chairman & Managing Director of Neogen Chemicals, commented on the company’s performance, noting the external challenges faced by the firm. Expressing optimism, Kanani highlighted the positive prospects in Electrolytes & Lithium Electrolyte Salts, stressing Neogen’s potential to capture a significant market share.