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Neogen Chemicals Ltd.’s Q4 FY22 Ebitda came in ~6% above our estimate, mainly on account of higher-than-expected growth in the inorganic chemicals business amid seasonality and elevated lithium pricing.
The organic chemicals segment witnessed some moderation on a QoQ basis on account of change in the product mix and some operational challenges faced while developing some new molecules.
However, Neogen Chemicals continues to work on high-value orders in developing new molecules and customised orders in the bromine business.
The management sounded confident in terms of growth in advanced intermediates and the custom synthesis manufacturing business.
In the existing inorganic chemicals business, while the management is witnessing better traction from international clients, there is uncertainty in terms of lithium prices, which are up by ~2- 2.5 times from their peak.
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