Neogen Chemicals (NEOGEN) Q1 24/25 earnings summary

Executive summary

• Achieved 9% year-on-year consolidated revenue growth to INR 180 crore in Q1 FY25, with profit after tax up 18% to INR 11.5 crore, driven by volume growth in non-agrochemical products and contributions from BuLi Chem and Neogen Ionics, despite global economic and supply chain challenges.

• Strategic focus shifted to non-agrochemical applications due to weak global agrochemical markets, resulting in more stable demand.

• Initial capacities for lithium electrolyte salts and electrolytes are operational, with commercial shipments and customer trials underway, supporting India's lithium-ion battery manufacturing ambitions.

• Board approved unaudited standalone and consolidated financial results for Q1 FY25, along with the limited review report from statutory auditors.

• Management remains confident of achieving INR 900–1,000 crore in revenues in FY26, anticipating a recovery in the global agchem market in H2 FY25.

Financial highlights

• Consolidated revenue for Q1 FY25 was INR 180 crore, up 9% year-on-year; consolidated net profit was INR 11.5 crore, up 18% year-on-year.

• EBITDA increased by 10% to INR 31 crore, with a margin of 17.1% despite higher employee costs and ongoing capacity expansion.

• Organic revenue grew 17% to INR 142 crore; inorganic revenue declined 14% to INR 38 crore due to lower lithium prices.

• Earnings per share (consolidated) for Q1 FY25 was INR 4.35, up from INR 3.92 in Q1 FY24.

• Historical 5-year revenue CAGR at 24% and PAT CAGR at 11%.

Outlook and guidance

• Confident in achieving full utilization of 30 KTA battery chemical capacity by FY28, with no expected delays in commissioning.

• Ongoing expansion in battery chemicals, with greenfield facility construction on track for commercial production in FY26.

• Ongoing discussions for long-term electrolyte supply contracts with major Indian battery manufacturers.

• Battery chemicals and energy storage seen as key growth drivers, with strong demand for non-Chinese supply.

• Management expects stronger performance in H2 FY25, driven by seasonal demand and anticipated recovery in agchem and lithium-based chemicals.