NEOGEN Q1 FY27 earnings call.
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Revenue
₹250 Cr
verified against source
Revenue YoY
34%
reported change
EBITDA
₹48.2 Cr
latest reported figure
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Actual signal trajectory
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What the record says.
Neogen Chemicals delivered a strong Q1 FY27 with consolidated revenue of ₹250 crore (+34% YoY), EBITDA of ₹48.2 crore (+53% YoY), and PAT of ₹17.1 crore (+67% YoY). The Hag plant reconstruction is nearly complete with commercial production expected in Q2. Management raised standalone revenue guidance from ₹875-950 crore to ₹950-1,050 crore for FY27, driven by organo-lithium reaching full utilization. Battery chemicals (Neogen Ionic) posted ₹19 crore revenue vs ₹5 crore in Q1 FY26, with FY27 guidance of ₹300 crore (₹200 crore salts, ₹100 crore electrolyte). A ₹600 crore QIP has been approved for deleveraging and future growth opportunities. FY29 full utilization target of ₹2,400-2,900 crore remains on track, supported by accelerating domestic gigafactory ramp-ups and non-China supply chain demand. Key risks include gigafactory execution delays, currency/commodity volatility, and working capital intensity given negative operating cash flows despite EBITDA generation.
Colored figures show movement against the previous available record.
Guidance to track
- Management raised standalone guidance from ₹875-950 crore to ₹950-1,050 crore, expecting base business to cross ₹1,000 crore in FY27, driven by full utilization of organo-lithium capacity.
- Battery chemicals (Neogen Ionic) guided at ₹300 crore comprising ₹200 crore from electrolyte salts and ₹100 crore from electrolyte, with major ramp-up expected in Q3-Q4 FY27.
- Current battery chemicals KAPEX designed for 30 GWh electrolyte and 40 GWh salts capacity, with full utilization targeted by FY29 at ₹2,400-2,900 crore revenue potential.
- Base business EBITDA margin guided at 18% ±1.5% for FY27, with expectation to improve to 18-20% range in FY28 as Hag plant stabilizes and operating leverage improves.
Risks flagged
- Electrolyte revenues are dependent on domestic ACC PLI gigafactory ramp-ups. Four of six planned gigafactories are expected to start by FY27, but delays in stabilization could impact ₹100 crore electrolyte guidance.
- Despite ₹582 crore cumulative EBITDA over five years, operating cash flow has been negative at ₹93 crore due to high working capital intensity (140-160 days). Management targets improvement by FY28-29 but no specific commitment.
- Analyst raised concern about liquid electrolyte's limited shelf life affecting export logistics. Management clarified electrolytes are for local market only; exports limited to stable components (salts, additives, solvents).
- Some Indian cell manufacturers with Chinese technology partners may face pressure to use Chinese formulations initially. Management is working with 5 of 6 gigafactories but faces 3-6 month qualification period before customer switching.
Key quotes
- 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.
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