Neogen Chemicals up 13% on favourable demand outlook; zooms 46% in 2 weeks: Neogen Chemicals share price
Source: Business Standard
Illustration by Binay Sinha
The stock of the specialty chemicals maker is trading higher for the sixth straight day, surging 40 per cent during the period. In the past two weeks, the stock has zoomed 46 per cent.
Neogen Chemicals is engaged in the business of manufacturing eco-friendly specialty chemicals that are used in pharmaceutical, engineering and agro-chemical (agchem) industries. Neogen has developed significant expertise in the highly demanding field of Bromine Compounds, Lithium compounds, and more recently, advanced intermediates for pharmaceutical industries and pesticides industries.
The company’s management remains optimistic about the long-term structural growth of the chemicals sector, driven by the China free/ China+1 strategy; focus on reducing chemical imports, robust R&D capabilities, and favourable government policies.
Moreover, India offers a strong alternative with its scale, technology, raw materials, and supportive reforms as global chemical companies seek to diversify their production bases. India’s chemical sector is well-positioned to benefit from this shift and capture a significant market share.
To mitigate current ag-chem market challenges in the existing business, the management said the company is looking at non-ag-chem opportunities until the global agro-chemical market recovers, and they remain confident of achieving Rs 900-1,000 crore in revenues in FY26, based on anticipated recovery in the latter half of this financial year.
Neogen aims to consolidate its position as a trusted business partner by maintaining consistent product quality and ensuring timely supply, ultimately establishing itself as India’s primary provider of electrolytes for EV applications.
This represents a potential opportunity for Neogen Ionics to enhance the installation of lithium salt capacities to support the burgeoning demand, the company said in its FY24 annual report.
For salts as well, the demand for non-Chinese lithium salts remains strong and is projected to grow at a healthy pace by 2030. At present, there are only 2-3 active manufacturers of Lithium Electrolyte Salts outside China, the company said.
First Published: Sep 19 2024 | 2:22 PM IST
