Neogen Chemicals Ltd stock opened its trading hour today at Rs 1450 and currently trades at Rs 1,535. The scrip has hiked around 14 percent as compared to the previous closing price of Rs 1,410.90.
Evaluating the stock movement over a horizon of three years, the stock has been able to provide multibagger returns of around 300 percent ranging from Rs 380 to the current levels. It means that if someone would have invested Rs 1,00,000 in the stock, it would have converted to Rs 4,00,000 within a period of three years.
Through a regulatory filing with the exchange yesterday, Neogen Chemicals announced that it has signed an agreement with MU Ionic Solutions Corporation (MUIS), a Japanese conglomerate, to acquire a manufacturing technology license pertaining to electrolytes in India.
As per the agreement, Neogen will obtain the license from MUIS for its proprietary as well as confidential manufacturing technology for the purpose of making Neogen’s electrolyte solutions at its manufacturing facility in India. These electrolytes will then be targeted by the company to meet the growing demand of lithium-ion cell manufacturers in India.
Neogen Chemicals Limited, a 3-decade old company, specializes in Bromine-based compounds, Grignard Reagents, and Inorganic Lithium Salts. Apart from the above, the company has also developed competencies in other related chemistries such as Alkylation, Acylation, Friedel Craft, Couplings, and Chlorination.
The company, apart from catering to the domestic markets, has, so far, exported to countries including the USA, UK, France, Germany, Spain, Italy, Japan, etc. The European parts, USA and Japan remain the largest markets for the company.
The basic parameters such as the revenues and net profit numbers have increased in recent quarters with revenues moving from Rs 148 crores in Q2 to Rs 186 crores in Q3 and net profits increasing from Rs 10 crores in Q2 to Rs 15 crores in Q3.
On a contrasting note, the profitability ratios of the company have seen a downgrade on a YoY basis. ROE numbers went down from 18.47 percent in FY20-21 to 14.34 percent in FY21-22. Likewise, the ROCE figures shifted from 16.75 percent in FY20-21 to 14.33 percent in FY21-22. The debt to equity ratio, with a positive intent of operations, has reduced from 1.18 in FY20-21 to 0.51 in FY21-22.
In the calendar year 2022, promoters hold a 60.19 percent stake in the company. In the recent quarterly movement from Q2 to Q3 of FY22-23, FIIs have increased their stake from 3.74 percent to 3.99 percent respectively.
Written by Amit Madnani
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