From mint · Pranati Deva · · 1m 40s
Neogen Chemicals Up 64% in 6 Months
Antique Stock Broking targets ₹3,050 for Neogen Chemicals with 23% upside potential.
In brief
Antique Stock Broking targets ₹3,050 for Neogen Chemicals with 23% upside potential. Antique Stock Broking recommends buying Neogen Chemicals at ₹2,482 with a ₹3,050 target price, implying 23% upside potential from battery chemicals growth. Originally reported by mint.
Antique Stock Broking Initiates Coverage
Antique Stock Broking initiated coverage on Neogen Chemicals with a Buy rating and a ₹ 3,050 target price.
“Antique Stock Broking initiated coverage on Neogen Chemicals with a Buy rating and a target price of ₹ 3,050”
Current Share Price Performance
Neogen shares surged 64% in 6 months but declined 2% in 1 week and 0.3% in last 1 month.
“Neogen shares surged 64% in 6 months but declined 2% in 1 week and 0.3% in last 1 month”
Battery Chemicals Growth Potential
Antique forecasts battery chemicals revenue to grow from 4% to 62% of Neogen's total revenue by FY30.
“Antique expects battery chemicals to increase their share of Neogen's revenue from 4% in FY26 to 62% by FY30”
Key Growth Drivers
Domestic battery manufacturing, customer approvals, and non-Chinese supply chains support Neogen's growth.
“The brokerage expects the specialty chemicals maker to enter a strong earnings growth phase as its battery chemicals business scales up, supported by domestic battery manufacturing, customer approvals and opportunities in non-Chinese supply chains”
Neogen's Battery Business Strategy
Neogen's subsidiary Neogen Ionics manufactures battery electrolyte and lithium hexafluorophosphate for lithium-ion batteries.
“Its subsidiary, Neogen Ionics, manufactures battery electrolyte and lithium hexafluorophosphate (LiPF6), a key salt used in lithium-ion batteries”
US Tax Credit Opportunity
Neogen positions itself to benefit from US tax-credit rules restricting Chinese material from 2027.
“Neogen has cleared final plant audits with three US electrolyte manufacturers, positioning it to pursue demand linked to US tax-credit rules that restrict sourcing from certain Chinese suppliers from 2027”
Revenue and Profit Projections
Antique forecasts Neogen's revenue to grow from ₹8.62 billion in FY26 to ₹37.59 billion in FY30.
“Antique forecasts Neogen's revenue to increase from ₹ 8.62 billion in FY26 to ₹ 37.59 billion in FY30”
EBITDA and Profit Growth
Antique expects EBITDA to grow from ₹1.37 billion to ₹6.75 billion by FY30 with improved margins.
“Antique forecasts Neogen's EBITDA to rise from ₹ 1.37 billion to ₹ 6.75 billion”
Execution Risks
Delays in domestic cell manufacturing, slower customer offtake, and US regulatory changes could delay growth.
“Delays in domestic cell manufacturing, slower customer offtake, changes to US regulations, competition and higher-than-expected leverage could postpone the anticipated improvement”
Valuation and Target Price
Antique values Neogen at 40 times FY29 earnings to arrive at a ₹3,050 target price.
“For valuation, Antique has valued Neogen at 40 times its estimated FY29 earnings per share to arrive at a target price of ₹ 3,050”
Investment Case
Antique expects Neogen to achieve EBITDA break-even in FY27 with strong growth through FY30.
“The brokerage expects the business to achieve ebitda break even in fy27”
Here's the gist
Antique Stock Broking recommends buying Neogen Chemicals at ₹2,482 with a ₹3,050 target price, implying 23% upside potential from battery chemicals growth.
