Neogen Chemicals is anticipating a significant boost in its battery chemicals segment, forecasting sales to range between ₹75 crore and ₹100 crore for the fiscal year 2024-25 (April-March). Looking ahead to the following fiscal year (2025-26), the company expects its sales to more than double, reaching approximately ₹250 crore as new production capacities come online and are fully utilized.
Harin Kanani, the Managing Director of this specialty chemicals firm, indicated that the revenue growth in FY26 will be driven by both existing facilities and new expansions. The company has plans for a new greenfield site, which will be roughly ten times the size of their current operations, in addition to ongoing brownfield expansion projects.
The total capital expenditure planned for these developments is around ₹1,500 crore. Once all the new capacities are operational by FY27, the company projects a revenue potential of up to ₹2,500 crore. Although Neogen Chemicals’ battery sales have been relatively modest so far, primarily involving trial sales, the revenue generated from the initial capacities is seen as a positive sign of future growth.
In the April-June 2024 quarter, Neogen Chemicals reported a 9% increase in revenue, totaling ₹180 crore. The company’s operating margin for this period was 17%, and its profit after tax grew by 18%, reaching ₹11 crore. The company’s peak debt, including working capital and capital expenditure, is expected to be around ₹1,500 crore.
Kanani also mentioned the possibility of raising additional equity in the future. This could be achieved through strategic investments in the battery sector or by increasing equity in Neogen, depending on the company’s business requirements and considerations related to debt and equity.
Neogen Chemicals is a leading specialty chemicals manufacturer, focusing on high-performance chemicals for various industries. With significant expansions underway, including new greenfield and brownfield projects, the company is poised for substantial growth in its battery chemicals segment. Neogen is set to achieve notable revenue increases, supported by strategic investments and advanced production capacities.
