Neogen Chemicals reports resilient performance in Q1 FY22

Neogen Chemicals Limited (Neogen) delivered strong financial performance during the first quarter ending 30th June, 2021. The Company recorded steady revenue from operations amounting to Rs. 84.6 crore in Q1 FY22 as compared to Rs. 76.6 crore in the corresponding quarter last year, higher by 11%. The Company also recorded healthy EBITDA performance driven by higher utilisation levels across all plants and operating leverage benefit.

This performance came in despite challenges on-ground with respect to the second wave of COVID-19 pandemic and related disruptions in logistics and supply chain. Positive demand environment continued to support the momentum.

Profit after tax (PAT) stood at Rs. 7.4 crore during the quarter compared to Rs. 6.1 crore in Q1 FY21. PAT momentum was facilitated by better operating efficiency and higher revenue growth across business verticals. Earnings pershare forthe quarterstood at Rs. 3.15 pershare (Rs. 2.62 per share in Q1 FY21).

Commenting on the Q1 FY22 performance, Mr. Haridas Kanani, Chairman & Managing Director, Neogen Chemicals said: "We are glad to have commenced the year on an encouraging note, with 11% growth in revenues and 20% gains in PAT. This came in despite several challenges faced during the quarter, in terms of severe second wave of Covid-19 resulting in logistical issues as well as supply chain disruptions. We traversed through all these short-term setbacks to demonstrate a sustainable performance driven by robust execution and elevated utilisation levels at all our plants. With significant reduction in Covid caseloads across the country as well as sharp recovery in the economic activity, the performance is expected to further amplify in the ensuing quarters.

Production of Organic Chemicals at the newly constructed facility in Dahej has commenced with trial commercial batches. Customer validation, product quality assurance and final statutory permissions are underway. Once commissioned, this state-of-the-art facility will significantly bolster the performance momentum of Neogen, as this site will allow us to undertake assignments of complex chemistries which require multiple steps. We are confident of fully commissioning this plant in Q2 of the current year and all efforts are in this direction. Our revenue guidance of Rs. 450 crore in FY22 remains unchanged.

Roadmap for ensuing years appears promising. Our focus will be to leverage our knowledge and expertise in key chemistries to deliver profitable performance in the long run. Our future expansion will be more modular in nature and we will continue to evaluate newer opportunities to cement our leadership position in niche chemistries."

Shares of Neogen Chemicals Limited was last trading in BSE at Rs. 934 as compared to the previous close of Rs. 903.1. The total number of shares traded during the day was 21070 in over 2153 trades.

The stock hit an intraday high of Rs. 935 and intraday low of 904. The net turnover during the day was Rs. 19564767.

Source : Equity Bulls

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