Buy Neogen Chemicals, target price Rs 1095: ICICI Direct

ICICI Direct has buy call on Neogen Chemicals with a target price of Rs 1095. The current market price of Neogen Chemicals Ltd. is Rs 913.5. Time period given by analyst is one year when Neogen Chemicals Ltd. price can reach defined target.

Neogen Chemicals Ltd., incorporated in the year 1989, is a Small Cap company (having a market cap of Rs 2110.97 Crore) operating in Chemicals sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 84.67 Crore, down -8.68 % from last quarter Total Income of Rs 92.72 Crore and up 10.48 % from last year same quarter Total Income of Rs 76.64 Crore. Company reported net profit after tax of Rs 7.32 Crore in latest quarter.


Investment Rationale

• Phase 1 and Phase 2 capex at Dahej bodes well for advance intermediates and custom synthesis revenue growth.
• Higher share of value added business portfolio to improve margins profile of the business
• Allocation of incremental FCF towards organic/inorganic growth likely to expand return ratios further

Promoter/FII Holdings
Promoters held 64.3 per cent stake in the company as of Sept 30, 2020, while FIIs held 4.8 per cent, DIIs 16.2 per cent and public and others 14.7 per cent.