Neogen Chemicals began FY26 on a cautious note, announcing its Q1 numbers for the quarter ended June 30, 2025. The manufacturer of specialty chemicals with a business in bromine and lithium compound-based products experienced a mixed bag of moderate growth, operational hurdles resulting from fires, and continued expansion in high-potential areas such as battery materials.
Key Financial Highlights
- Revenue: The firm reported consolidated revenues of ₹187.91 crore, which represents a 3.5% year-on-year (YoY) growth over ₹181.52 crore in Q1 FY25 but a 6.9% fall quarter-on-quarter (QoQ) from ₹201.86 crore in Q4 FY25.
- Profit After Tax (PAT): The net profit was at ₹10.26 crore, which fell 10.5% YoY from ₹11.47 crore and a steep 39.4% below the last quarter’s ₹16.93 crore.
- EBITDA: Increased by 2% YoY at ₹32 crore
- EBITDA margin was broadly unchanged at 16.9%.
- Earnings Per Share (EPS): Basic and diluted EPS was at ₹3.90, down from ₹4.30 in Q1 FY25 and ₹6.40 in Q4 FY25.
Operational Update and Challenges
Despite the company registering year-on-year growth in revenue, profitability was checked by a rise in raw material and operational expenses, Q1 expenses were at ₹173.67 crore, which is a 4.8% rise from last year’s ₹165.78 crore. The firm also gained an insurance recovery of ₹80.55 crore due to the fire in its Dahej plant, a critical facility, that temporarily affected production and supply chains. This payment is anticipated to partially offset the financial burden and aid continued rebuilding and plant expansion activities.
Business Segments and Expansion
Neogen is further consolidating leadership in the lithium salts and battery chemicals space, serving the expanding Indian and international electric vehicle and battery storage industries. With a number of local battery producers scaling up, Neogen’s under-construction plants, equipped with advanced manufacturing technology—are likely to commence commercial production by the end of FY26.
The company’s core specialty chemicals business in pharmaceuticals, agrochemicals, and engineering sectors has shown resilience, even as pricing remains subdued amid global headwinds.
Management Commentary and Outlook
Neogen’s management stressed that Q1’s decline in profitability is temporary, correlated to Dahej’s slip and increased cost inflation. With the new battery materials initiative likely to power significant revenue over the next few quarters and ongoing demand within its specialty businesses, Neogen’s long-term growth prospects are considered to be healthy. The company remains focused on cost optimisation, supply chain excellence, and product innovation as it regains operational momentum.
Key Takeaways
Neogen Chemicals’ Q1 FY26 performance indicates a firm juggling short-term operational challenges with investments in high-growth segments. With fire-related disruption waning and expansion initiatives being completed, the firm is set to improve its performance in the second half of the year.
