Antique Stock Broking initiates coverage on Neogen Chemicals with Buy call and target price of ₹3,050

Domestic brokerage house Antique Stock Broking has initiated coverage on Neogen Chemicals with a Buy rating and a target price of ₹3,050, which suggests an upside of about 23 percent from the reference market price of ₹2,482. The stock has seen strong returns recently, surging 64 percent in the last six months and 14 percent in three months, though it has dipped slightly by 0.3 percent over the past month. The company hit a 52-week high of ₹2,785 in October 2026 and a low of ₹978 in December 2025.

Growth Drivers

The brokerage expects specialty chemicals maker Neogen to enter a major earnings growth phase as its battery chemicals business scales up. This expansion is supported by domestic battery manufacturing, new customer approvals, and rising demand in non-Chinese supply chains. Subsidiary Neogen Ionics manufactures battery electrolyte and lithium hexafluorophosphate, a key salt used in lithium-ion batteries. The company uses licensed Japanese manufacturing technology from MU Ionic Solutions and operates its salt business through a joint venture with Japan's Morita. Battery chemicals are projected to grow from four percent of revenue in fiscal year 2026 to 62 percent by fiscal year 2030, with the segment expected to reach EBITDA break-even in fiscal year 2027.

Financial Projections

Antique forecasts Neogen's revenue, EBITDA, and adjusted profit after tax to grow at compound annual growth rates of 45 percent, 49 percent, and 87 percent respectively between fiscal year 2026 and fiscal year 2030. Revenue is projected to rise from ₹8.62 billion to ₹37.59 billion, while EBITDA is expected to jump from ₹1.37 billion to ₹6.75 billion over the same timeframe. The valuation is set at 40 times the estimated fiscal year 2029 earnings per share to reach the ₹3,050 target.

Risks

Investment risks include the timely ramp-up of new facilities, customer offtake, potential changes to US regulations, competition, and the company's management of elevated debt. The battery expansion involves capital expenditure of approximately ₹17.95 billion, with free cash flow expected to turn positive in fiscal year 2028.

Context

Specialty chemicals are high-value, tailored chemical products used in diverse end-industries like pharmaceuticals, agriculture, and electronics. The rising global push toward electric vehicles has drastically accelerated demand for lithium-ion battery components and non-Chinese supply chain alternatives. Brokerage target prices represent analysts' projections for a stock's future value based on expected financial performance and market conditions.