After Neogen Chemicals posted a good set of earnings for the quarter ended September 30, the company’s managing director Harin Kanani told CNBC-TV18 on Monday that the numbers were good due to contribution from the Dahej unit, wherein phase I came online, and phase II came online in October.
Talking about lithium ion batteries, he said, the company has been manufacturing lithium salts for the last 30 years but so far, there was no clarity on the production of lithium ion batteries from scratch, where the entire value addition is established in India. So for the company, manufacturing the lithium ion cells and the components is critical, he said.
As the government has notified the production linked incentive (PLI) scheme for ACC (Advanced Chemistry Cell) batteries, Neogen Chemicals has been discussing with several customers who are planning to set up units. “Looking at projections, we have basically taken a decision to start at least a small plant, which will be more like an initial pilot unit to produce these electrolytes required for making the lithium,” said Kanani.
This would be the company’s first step in the lithium ion battery space. However, the company has the advantage of backward integration into making the lithium salts required for that, which is similar chemistry that the firm has been doing for the last 30 years, he explained.
So by the first half of next fiscal, Neogen Chemicals would have about 250 metric tonnes in terms of operational capacity, which would be the pilot project, confirmed Kanani. He added that most of the commercial cells are expected to come online by end of 2023 and early 2024.
The company’s revenues were up 38 percent year-on-year (YoY) at Rs 113 crore versus Rs 82 crore for the same period last year. The earnings before interest, taxes, depreciation, and amortisation (EBITDA) was up 33 percent at Rs 20.5 crore versus Rs 15.4 crore. The firm’s operating margins were down to 18.1 percent versus 18.8 percent YoY.
For the entire interview, watch the video