The newly-listed Neogen Chemicals has given 41 percent returns since its listing and 69 percent returns since its issue this year, outperforming other IPOs that hit the stock exchanges in 2019.
A total of eight initial public offerings (IPOs) hit the stock exchanges so far this year, an extremely small number when compared to the 45 IPOs in the fiscal year 2017-18. Approximately Rs 5,500 crore has been raised through the IPO route in 2019, one-fourth of the amount that was raised in H12018.
Neogen Chemicals trades at a cheap valuation of 30x with a market capitalisation of Rs 820 crore.
At 12:30 PM, the stock was trading at Rs 350.70 per share, lower by 0.78 percent on the NSE. Intraday, the stock price was down 1.13 percent to its day's low at Rs 348.90.
From FY14 to FY19, the company has consistently reported good gains. Its net revenue from operations rose from Rs 74 crore to Rs 239 crore in just 5 years, a growth of 223 percent. The PAT also improved from Rs 4 crore to Rs 21 crore in FY19, a growth of 435 percent.
Neogen Chemicals is a leading manufacturer of bromine and lithium-based specialty chemicals, operating since 1991. It exports to 27 countries with 49 percent of its revenue coming from the domestic market and the remaining 51 percent via international markets.
Till now, the company has developed 198 products in-house. Neogen has two manufacturing facilities located in Mahape, Navi Mumbai in Maharashtra, and Karakhadi, Vadodara in Gujarat. It is presently developing a Greenfield manufacturing unit in Dahej SEZ, in Gujarat.
In its research report, Anand Rathi, one of India's leading financial services firm, said, “Neogen Chemicals has an installed capacity for 1,30,400 litres of organic chemicals with capacity utilisation of 64 percent. The company plans to double capacity to 256,000 liters and 2,400 tons of organic and inorganic chemicals to cater to mounting demand."
"Neogen Chemicals plans to double its capacities in both organic and inorganic chemicals. Taking the total capacity of organic to 1,30,400 litres and inorganic to 2,400 MT (metric tonne). The expansion of inorganic chemicals will be completed by Q3FY20 while expansion of organic will be done by September 2021", said SMC Institutional Equities in its report.
It further added that the company going ahead aims to achieve top-line of Rs 500 crore by FY22 on the back of new capacities coming up and demand already there along with growth in pharmaceuticals and agrochemicals.
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First Published: IST