Neogen Chemicals Q4 FY26 Earnings Analysis

- FY27 and FY28 are expected to see double-digit revenue growth in the base business, especially post the Dahej plant ramp-up. - Battery chemicals segment projected to generate INR 400-500 crore revenue in FY27, considering limited salt sales from Pakhajan in H2 FY27. - Electrolyte revenues are expected to increase in H2 FY27 due to capacity ramps by major customers like Ola, Exide, and Waaree. - The Pakhajan salt plant’s full 30,000 MT capacity is targeted to be operational by end of H1 FY27, with gradual ramp-up based on business visibility. - By end of 2027, India's battery cell manufacturing capacity expected to reach 40-50 GWh with new and expanding capacities. - Salt capacity currently sufficient till FY28; potential need for capacity addition by FY29 depending on international and local demand. - The Dahej replacement plant commissioning is on track for Q1 FY27, supporting growth ambitions and future sales expansion.

- Neogen Chemicals expects steady revenue growth driven by the ramp-up of battery chemicals, including electrolyte and salts production at the Dahej and Pakhajan plants. - FY27 battery chemicals revenue is guided at INR 400-500 crore with electrolyte production from Pakhajan starting in H1 FY27 and salts in H2. - Base business (organic and inorganic chemicals) is expected to deliver double-digit revenue growth in FY27 and FY28, recovering from fire incident impacts. - EBITDA impacted short-term by ramp-up costs, interim toll manufacturing, and higher interest expense related to Dahej plant reconstruction but expected to improve with insurance claim recoveries and operating efficiencies. - Promoter equity infusion of INR 150 crore and $20 million from Morita aid in reducing interest burden and support growth initiatives. - Full capacity utilization at Dahej (30,000 MT salt) targeted by end H1 FY27 with gradual ramp-up aligned with demand visibility. - Insurance claims will partially offset transient costs in FY27 and FY28, supporting profit recovery. - Overall, management is confident about growth, margin expansion, and long-term value creation as projects come online.

- Neogen Chemicals is progressing with the Pakhajan greenfield project, targeting: - Electrolyte commercial production in H1 FY27. - Electrolyte salts production in H2 FY27. - Equipment arrival and assembly underway; trial production expected soon. - Rebuilding and expansion of the Dahej plant ongoing, with completion and commissioning expected by Q1 FY27 and capacity ramp-up by March 2026. - Preferential equity infusion planned from Promoter Group of INR 150 crore by March 2026 to support growth and reduce interest burden. - Joint venture with Morita Investment Ltd for LiPF6 salt production, with $20 million investment for 20% stake, expected receipt by Q1 FY27. - Planned capacity includes readiness for 30,000 MT salt production and 30 gigawatt-hours electrolyte production by end of H1 FY27. - Potential future capacity additions considered around FY29 based on demand growth, with decisions expected by end of FY27/FY28.

- Promoter group plans a preferential equity infusion of INR 150 crore, expected before March 2026 or by Q1 FY27, subject to regulatory approvals. - Around INR 200 crore equity expected from Morita towards their 20% stake in the JV by end of current quarter or Q1 FY27. - Insurance claim recoveries of approximately INR 200 crore expected by March or April 2026. - Overall, approximately INR 550 crore (equity + insurance) expected to come in this year or early next year. - Debt discussions ongoing with banks to maintain a 70:30 debt-equity ratio for the JV capital; exact debt levels and repayments are being finalized. - First principal repayment for Dahej loans expected in Q1 FY28, about one year after SCOD. - Some of the funds raised will be used for working capital and capex contributions for ongoing projects.

- Salt business has shown increased interest with many regular and non-regular customers. - Majority of requirements for one key customer are complete, with final approval timelines expected by Q1 FY27. - Three to four other customers have started sampling and approving, with audits planned between March and May 2026. - Dahej site approval expected by June 2026; sales to start progressively from Q2 FY27 onwards. - Pakhajan site target approval by September 2026, with trial production starting in H2 FY27 and sales from Q4 FY27. - Significant inquiries for lithium salts and intermediates due to regulatory changes and demand growth. - Provisional approvals received from multiple global clients with final audits completing in Q1 FY27. - Overall, order book and pending approvals are progressing well, enabling ramp-up of supply capacity through 2026 and beyond.