Specialty chemical firm Neogen Chemicals announced Q2FY23 results: Neogen Chemicals Limited (Neogen) remained on a high growth trajectory during Q2FY23 and H1FY23. The company delivered 50% growth in revenues, 35% improvement in EBITDA and a 13% increase in Profit After Tax (PAT) At Rs 296 crore, revenues registered a growth of 50% in H1FY23, over H1FY22 revenue of Rs 197.8 crore EBITDA at Rs 48.9 crore in H1FY23 was up 35% despite inflationary cost pressures in key raw materials and utilities The EBITDA percentage margin considers the impact of higher revenues and higher RM costs with preserved absolute earnings. Profit after tax (PAT) stood at Rs 21.0 crore during H1FY23 as compared to Rs 18.5 crore in H1FY22 Earnings per share (EPS) for H1FY23 stood at Rs 8.41 per share (Rs 7.94 per share in H1FY22) Commenting on the Q2 & H1 FY23 performance, Haridas Kanani, Chairman & Managing Director, Neogen Chemicals, said: “We have reported superior performance during the first half of fiscal year 2023, reflected by 50% growth in revenues, 35% improvement in EBITDA and 13% increase in Profit After Tax. This is an outcome of collective efforts put in by our teams to ensure that we expand our capabilities to the fullest and offer best possible value to our long-standing customers. The performance was fueled by continued positive demand outlook from key end-user segments, further aided by gains from incremental capacity available over same period last year. All this was achieved in an environment that was premised on prolonged inflationary headwinds in key raw materials and other utilities. Our CAPEX initiatives are underway, and construction is progressing as expected both in lithium-ion battery chemicals and existing business operations. We aim to make significant inroads in the chosen products and chemistries to elevate our performance trajectory. We have been in constant dialogue with our customers and have received positive feedback for our products. Sizeable CAPEX plans will be lined up in the second half of current fiscal year, based on how final discussion progresses for lithium-ion battery materials space. Within CSM and Advanced Intermediate space, we remain confident of garnering additional share based on our in-house strengths and capabilities across several chemistries. The objective is to diversify the product mix towards value-added offerings, and we are on the right track to attain that. The medium-to-long term prospects look favorable and Neogen is well poised to drive higher topline and profitability based on strong execution abilities. This is in addition to benefits emerging from upcoming projects that will start contributing from next year. The demand landscape remains promising and Neogen will channelise its experience to deliver sustained performance in the years to come.” Result PDF
Conference Call with Neogen Chemicals Management and Analysts on Q1FY23 Performance and Outlook. Listen to the full earnings transcript.
Neogen Chemicals announced Q1FY23 Result : Neogen Chemicals Limited (Neogen) reported robust financial performance during the quarter ended 30th June, 2022. The Company delivered revenues of Rs. 147.9 crore in Q1 FY23, depicting a growth of 75%. The strong topline performance was driven by incremental benefits accruing from the expanded capacity. This was supported by continued positive demand across key products. The Company has been able to leverage its expertise in process chemistriesto focus on high-value products with multi-stage processes. Profit after tax (PAT) stood at Rs. 11.1 crore during the quarter as compared to Rs. 7.4 crore in Q1 FY22. Strong double-digit growth in PAT was aided by good operating performance. In addition, gains from various cost management initiatives aided earnings growth during the quarter under review. Higher depreciation was in-line with new capacities added. Earnings per share (EPS) for the quarter stood at Rs. 4.43 per share (Rs. 3.15 per share in Q1 FY22). During the period under review, the Company witnessed significant increase in the prices of Lithium raw materials which Company was able to pass on to the customers, resultantly protecting the absolute EBITDA. The EBITDA percentage margin decline is optical as it considers higher revenues and higher RM costs with preserved absolute earnings. Commenting on the Q1 FY23 performance, Mr. Haridas Kanani, Chairman & Managing Director, Neogen Chemicalssaid: “I am pleased to share that we began FY23 on a positive note with strong all-round performance. Revenues grew by 75%, while EBITDA and PAT improved by 58% and 51% respectively. This is a testament of our superior execution capabilities where products are being scaled up rapidly based on encouraging demand trends. The performance momentum was steered by strong gains from the expanded capacity, and this came in spite of challenging operating environment marred by high input and utility costs, logistical disruption as well as extreme volatility in exchange rates during thequarter. We are entailing several CAPEX initiatives this year to elevate our performance trajectory in the existing business and to participate in the sunrise sector of lithium-ion battery chemicals. These initiatives are underway as per our earlier timelines. Overall, discussions with both domestic and international players are advancing as expected, and there is continued interest with robust demand. We have also started submitting samples for technical approvals with several customers. Discussions for approval of Neogen, as a vendor are progressing well although slightly delayed from our original timelines. Based on final approvals, we will align our larger CAPEX plans within lithium-ion battery chemicals space in H2 of current financial year which will start contributing materially earliest from FY25. In the CSM/ advanced intermediate business, we have started witnessing traction from other newer sectors which are non-agro and non-pharma and will endeavor to progressively increase the contribution at the Company level. This is in-line with our focus of expanding the portfolio of value added products. The road ahead appears promising, and Neogen will continue to leverage its expertise and sweat its assets to deliver accelerated performance. This will be anchored by incremental gains coming from scheduled commissioning of key projects in this and next financial year. Overall demand trajectory is very favorable, and we foresee immense opportunities unfolding in the chemicals sector that will help Neogen.” Result PDF