A leading speciality chemicals manufacturer saw its stock surge 5.3% following regulatory approval of its merger scheme by India’s National Company Law Tribunal. The proposed amalgamation with its wholly owned subsidiary marks a strategic move to streamline operations and enhance market presence in the chemical sector.
Share Price Movement
The share price of Neogen Chemicals Limited rose 5.35 percent just before market close from Rs. 2,061 per share on Friday. Overall, the stock closed 0.44 percent down from its previous close of Rs. 2,181 per share to Rs. 2,171. The market capitalisation now stands at approximately Rs. 5,728 crore as of January 10, 2025.
What’s Driving the Price?
The merger of Neogen Chemicals with its subsidiary BuLi Chemicals India, now approved by the National Company Law Tribunal, promises significant benefits. This consolidation will streamline operations, reduce costs through unified administration, and leverage BuLi’s organolithium compounds technology to enhance Neogen’s market position in pharmaceutical and agrochemical sectors.
The integration strengthens Neogen’s manufacturing capabilities and competitive edge, positioning it for growth in specialty chemicals while creating new revenue opportunities in both domestic and international markets.
Financial Highlights
According to its recent filing, in the quarter ending September 2024, Neogen Chemicals’s consolidated revenue from operations has increased by 19.13 percent YOY from Rs. 162 crore in Q2 FY24 to Rs. 193 crore in Q2 FY25 and increased by 7.2 percent QoQ from Rs. 180 crore in Q4 FY24.
The company’s consolidated net profit has increased by 37.5 percent YoY, from Rs. 8 crore in Q2 FY24 to Rs. 11 crore in Q2 FY25. As compared to the last quarter of 2025, the company’s net profit has not changed.
The average price-to-earnings (P/E) ratio in the chemical industry is 32.66. which is less than Neogen Chemicals’s current P/E ratio of 140.
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Market Outlook
India’s chemical industry is experiencing steady growth, driven by rising domestic demand, strategic investments, and government support. While chemical production slightly declined in FY 2023-24, petrochemical output grew 8.7%, contributing to an overall industry growth of 5.45%.
Exports of organic and inorganic chemicals rose 16.8%, reaching $2.5 billion in April 2024. With 100% FDI allowed under the automatic route and $21.7 billion investments since 2000, the sector is well-positioned for sustained expansion.
Shareholding Pattern
As of the September 2024 shareholding pattern, Neogen Chemicals Limited is primarily held by the promoters at 51.22 percent, foreign institutional investors at 8.17 percent, and the public at 18.12 percent.
About Company
Neogen Chemicals Ltd., founded in 1991, is a premier Indian manufacturer specialising in bromine and lithium-based speciality chemicals. Operating advanced facilities in Maharashtra, Gujarat, and Telangana, the company addresses industries such as pharmaceuticals, agrochemicals, electronics, and polymers. Its product line includes bromine compounds, lithium salts for batteries, and Grignard reagents.
In 2023, Neogen established Neogen Ionics Limited, focusing on lithium-ion battery materials, and is planning a 30,000 MT plant in Gujarat. The launch of Neogen Chemicals Japan Corporation in 2024 marked its global expansion, enhancing partnerships in Japan’s speciality chemicals market. With a focus on innovation and strategic growth, Neogen Chemicals continues to lead India’s speciality chemicals sector.
Written By Fazal Ul Vahab C H
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