After strong returns in the last 6 months, domestic brokerage house Antique Stock Broking has initiated coverage on Neogen Chemicals with a Buy rating and a target price of ₹3,050, implying an upside of around 23% from the reference market price of ₹2,482.
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 combines a resilient specialty chemicals business with a much larger battery opportunity. With plants largely built and customer qualifications underway, the key execution hurdles are behind us, while the earnings ramp-up is still ahead, creating a compelling growth and re-rating opportunity,” Antique Stock Broking said.
The brokerage expects Neogen's revenue, EBITDA and adjusted profit after tax (PAT) to grow at compound annual growth rates (CAGRs) of 45%, 49% and 87%, respectively, between FY26 and FY30. However, the investment case depends on the timely ramp-up of new facilities, customer offtake and the company's ability to manage elevated debt.
The chemicals stock has surged 14% in 3 months, 64% in 6 months, and 70% in the last 1 year. However, in more recent times, it has declined 2% in 1 week and 0.3% in last 1 month.