Buy Neogen Chemicals, target price Rs 1925: HDFC Securities

HDFC Securities has buy call on Neogen Chemicals with a target price of Rs 1925. The current market price of Neogen Chemicals is Rs 1494.7.

Neogen Chemicals, incorporated in the year 1989, is a Small Cap company (having a market cap of Rs 3716.08 Crore) operating in Chemicals sector.

Neogen Chemicals key Products/Revenue Segments include Organic/Inorganic Heavy Chemicals and Other Operating Revenue for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 205.65 Crore, up 9.59 % from last quarter Total Income of Rs 187.65 Crore and up 30.45 % from last year same quarter Total Income of Rs 157.65 Crore. Company has reported net profit after tax of Rs 14.29 Crore in latest quarter.

The company’s top management includes Mr.Haridas Kanani, Dr.Harin Kanani, Mr.Shyamsunder Upadhyay, Mr.Anurag Surana, Mr.Sanjay Mehta, Mr.Hitesh Reshamwala, Prof.Ranjan Kumar Malik, Mrs.Avi Sabavala. Company has JMT & Associates as its auditors. As on 31-03-2023, the company has a total of 2 Crore shares outstanding.

Investment Rationale
The brokerage's BUY recommendation on Neogen Chemicals (NCL), with a target price of INR 1,925/share is premised on increasing contribution of the high-margin CSM business to revenue; entry into the new-age electrolyte manufacturing business; capacity-led expansion growth opportunity; constant focus on R&D; and improving return ratios and strong balance sheet, going forward.

Promoter/FII Holdings
Promoters held 60.19 per cent stake in the company as of 31-Mar-2023, while FIIs owned 4.13 per cent, DIIs 20.01 per cent.