Neogen Chemicals · tone and specificity signals across the available quarters.
Language signals
What we have seen is that with the tariff coming in now there is more clarity and while there is lesser IRA for the battery EV manufacturers there is clarity on the battery and the requirement of non-China. So again customers who were sitting on the fence are now even more keen.
I request all of you to have a little bit of patience. What we really should be looking at is what is the scenario in 2027-28 when we said we are going to have full utilization levels.
I think maximum they'll have three supplier approved. Backup would be somewhere on a lower side 10-15%, on the higher side around 25-30%.
We have revised our revenue guidance in the legacy business from 875 to 950 crores to 950 to 1,050 crores. We feel the base business should be able to cross 1,000 crores in the current financial year.
FY29 would be a very good year from cash flow conversion point of view. FY29 is the year where you'll have full utilization of our initial investment into the battery and structural changes to improve working capital efficiency.
The US customers are expecting to shift from China to non-China suppliers from January onwards. We have already started some trial supplies and expect the shift to happen in Q3 and Q4.
We delivered 9% revenue growth in Q3 with a gross profit up 13% with around 150 basis points margin expansion. While topline growth was strong, EBITDA and PAT were pressured by transient costs related to Neoen Ionics ramp up, elevated operational expenses due to fire incidents and interim toll manufacturing setup and higher finance cost from Dahej plant reconstruction.
Upon commissioning, Neoen will emerge as highly cost competitive global source for lithium salts and electrolytes backed by proven Japanese technology. We are currently seeing significant tailwinds from the US 45X tax credits, non-FOCC requirements and recent price volatility in China.
Our guidance remains the same because the expectation was that our Dahej site will be fully ready by June and we will start having sales from basically Q1 and majorly from Q2 onwards. We have right now not considered Q4 sales from Patanjali, so that we have kept as a backup.