Up 64% in 6 months already; should you still buy Neogen Chemicals? Antique sees 23% upside potential - Check target
After strong returns in the last 6 months, domestic brokerage house Antique Stock Broking has initiated coverage on Neogen Chemicals with a Buy rating and a target price of ₹3,050, implying an upside of around 23% from the reference market price of ₹2,482.
The brokerage expects the specialty chemicals maker to enter a strong earnings growth phase as its battery chemicals business scales up, supported by domestic battery manufacturing, customer approvals and opportunities in non-Chinese supply chains.
“Neogen combines a resilient specialty chemicals business with a much larger battery opportunity. With plants largely built and customer qualifications underway, the key execution hurdles are behind us, while the earnings ramp-up is still ahead, creating a compelling growth and re-rating opportunity,” Antique Stock Broking said.
The brokerage expects Neogen's revenue, EBITDA and adjusted profit after tax (PAT) to grow at compound annual growth rates (CAGRs) of 45%, 49% and 87%, respectively, between FY26 and FY30. However, the investment case depends on the timely ramp-up of new facilities, customer offtake and the company's ability to manage elevated debt.
The chemicals stock has surged 14% in 3 months, 64% in 6 months, and 70% in the last 1 year. However, in more recent times, it has declined 2% in 1 week and 0.3% in last 1 month.
It had hit its 52-week high of ₹2785 in October 2026 and its 52-week low of ₹978 in December 2025.
Battery chemicals are expected to become Neogen's biggest growth driver over the coming years. Its subsidiary, Neogen Ionics, manufactures battery electrolyte and lithium hexafluorophosphate (LiPF6), 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.
Antique expects battery chemicals to increase their share of Neogen's revenue from 4% in FY26 to 62% by FY30. The segment was loss-making through FY26 while its electrolyte and salt facilities were being built and undergoing customer qualification. The brokerage expects the business to achieve EBITDA break-even in FY27.
“The delayed commissioning pushes the ramp-up to the right but does not alter the medium-term earnings trajectory, as the capacity and customer approvals underpinning our FY30E estimates are already in place,” Antique Stock Broking said.
The brokerage believes customer qualification could provide a competitive advantage. Approvals can take 12-24 months, while battery manufacturers are reluctant to switch suppliers once a product has been qualified. Neogen has cleared final plant audits with three US electrolyte manufacturers, positioning it to pursue demand linked to US tax-credit rules that restrict sourcing from certain Chinese suppliers from 2027.
Domestic opportunities could also expand as India's battery manufacturing capacity grows. Neogen's Dahej and Pakhajan facilities are positioned to serve local cell manufacturers, while its lithium salt capacity provides an additional export opportunity. Beyond battery chemicals, the company's established specialty chemicals business offers a relatively steady earnings base, supported by contract synthesis and manufacturing (CSM), advanced intermediates and a recovery in production following a fire at Dahej.
Antique forecasts Neogen's revenue to increase from ₹8.62 billion in FY26 to ₹37.59 billion in FY30. EBITDA is projected to rise from ₹1.37 billion to ₹6.75 billion, while the EBITDA margin is expected to improve from 15.9% to 17.9% over the same period.
The brokerage expects operating leverage to improve as the battery chemicals facilities ramp up. With much of the planned capital expenditure already committed, higher utilisation could translate into stronger incremental earnings. It expects battery chemicals to drive the bulk of the company's projected growth, while the core business is forecast to grow at a 15% CAGR to ₹14.3 billion by FY30.
“Neogen's 5.5ktpa salt capacity provides the key export opportunity through its 80:20 JV with Japan's Morita. Its non-FEOC structure positions the business to participate in US tax-credit-linked demand from 2027, when cell makers face restrictions on Chinese material,” Antique Stock Broking said.
For valuation, Antique has valued Neogen at 40 times its estimated FY29 earnings per share to arrive at a target price of ₹3,050. The brokerage's valuation implies an enterprise value-to-EBITDA multiple of around 20 times FY29 estimates, compared with its cited one-year forward average of 26 times.
However, execution and balance-sheet risks remain important. The company's battery expansion involves capital expenditure of approximately ₹17.95 billion, and the brokerage expects free cash flow to turn positive in FY28. Delays in domestic cell manufacturing, slower customer offtake, changes to US regulations, competition and higher-than-expected leverage could postpone the anticipated improvement.
Pranati Deva is a seasoned financial journalist with over a decade of experience in high-pressure newsroom environments, currently working as a Senior Sub Editor at LiveMint. Over the years, she has developed a reputation for sharp editorial judgement, a strong grasp of market dynamics, and the ability to translate complex financial developments into clear, engaging stories for a wide audience. <br><br> Her core areas of coverage include stock markets, leading listed companies, currencies, and commodities, with a particular strength in fast-paced, real-time market reporting. She is known for handling breaking market news, earnings-driven stock movements, and macroeconomic developments with speed, accuracy, and context—qualities that are essential in financial journalism. <br><br> Pranati has built a diverse and credible professional track record across some of India’s most respected news organisations, including MintGenie, CNBC-TV18, Business Standard and EconomicTimes.com. During her stints at these platforms, she produced data-driven market stories, curated and steered live blogs during volatile trading sessions, and conducted interviews with market veterans, fund managers, economists, and industry experts. Her work often combines on-ground reporting with analytical depth, helping readers make sense of daily market fluctuations and longer-term trends. An alumnus of the Symbiosis Institute of Media and Communications and Hansraj College, University of Delhi, Pranati brings a strong academic foundation to her journalism. She specialises in real-time financial reporting, with a keen focus on precision, balance, and insight, aiming to decode market movements in a way that is both informative and accessible to readers across experience levels.
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HomeMarketsUp 64% in 6 months already; should you still buy Neogen Chemicals? Antique sees 23% upside potential - Check target
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