Neogen targets March 2027 completion for Rs 1,795 crore

Neogen Chemicals Limited said its Rs 1,795 crore Dahej Phase 1 and Pakhajan Phase 2 battery-materials programme is targeted for completion by March 2027. Neogen reported cumulative capital expenditure of Rs 1,537 crore, with Dahej Phase 1 budgeted at Rs 428 crore for February 2027 completion and Pakhajan Phase 2 at Rs 1,367 crore for March 2027.

What is Neogen's battery-materials budget and completion schedule?

Neogen's two disclosed battery-materials projects have a combined estimated cost of Rs 1,795 crore, of which Rs 1,537 crore had been spent cumulatively as of the November 1, 2026 update. Dahej Phase 1 accounts for Rs 428 crore and has a target completion date of February 2027, while Pakhajan Phase 2 accounts for Rs 1,367 crore and is expected to be completed by March 2027.

Pakhajan Phase 2 is the larger project, representing Rs 1,367 crore of the Rs 1,795 crore total estimate, compared with Rs 428 crore for Dahej Phase 1. Neogen said the project scope and specifications incorporate design optimisation after a transition to advanced Japanese technology, as well as greater localisation of critical sub-components to reduce import dependence and support long-term operational reliability.

Both projects are supported by promoter equity infusion and planned funding support from a joint-venture partner, according to Neogen's update. The company did not disclose the amount, timing or terms of that planned partner funding, leaving the Rs 1,537 crore cumulative capital expenditure as its stated measure of spending progress.

What battery-material capacity has Neogen commissioned?

Neogen has fully commissioned a 2,000-metric-tonne electrolyte plant at Dahej, while its lithium electrolyte salts and additives capacity is at commissioning and trial stages. At an existing 1,500-metric-tonnes-per-annum (MTPA) salts and additives project, 200 MTPA was commissioned and first approval material was shipped to customers.

Another 1,000 MTPA at the 1,500-MTPA project was commissioned in Q2 FY27, meaning the second quarter of fiscal year 2027, while trial production was under way for the remaining 300 MTPA. Separately, Neogen expects to commission a new 1,000-MTPA salts and additives capacity and a 500-metric-tonne additional intermediate facility in H2 FY27, the second half of fiscal year 2027.

For the broader projects, Neogen said mechanical completion remained on schedule for electrolytes in H1 FY27 and electrolyte salts in H2 FY27. Mechanical assembly at the electrolyte facility is complete and trial runs have begun, while facility validation and product approvals are under way with domestic battery makers.

How far have Neogen's customer approvals progressed?

Neogen has secured provisional approvals from five major international customers for lithium electrolyte salts, completed final site audits for three United States-based electrolyte manufacturers and begun commercial supply to two customers. The update did not disclose the supply volumes, contract values or names of the two customers receiving commercial deliveries.

For electrolyte products, Neogen said validation and approvals by leading domestic battery makers were under way after mechanical assembly was completed and trial runs began. The company had received electrolyte recipes from five to six giga factories and was conducting joint trials, which it reported alongside active discussions with domestic and international cell manufacturers.

Management said it expected a substantial scale-up in Q4 FY27 and beyond as upcoming advanced chemistry cell battery plants come online in India. It also cited a progressive shift by United States electrolyte manufacturers towards sourcing from non-foreign entity of concern suppliers in India; this was management's expectation, rather than a disclosed customer order or sales forecast.

How is Neogen organising and funding the expansion?

Neogen raised Rs 600 crore through its first qualified institutional placement, or QIP, which was oversubscribed 6.5 times. The company said the proceeds would be used for debt repayment, incremental business requirements and growth opportunities, rather than assigning a stated amount specifically to the Rs 1,795 crore battery-materials programme.

Neogen also executed a business transfer agreement, or BTA, between Neogen Ionics Limited and step-down subsidiary Neogen Morita New Materials Limited. The BTA transfers the lithium-ion electrolyte salt undertaking, including LiPF6, to Neogen Morita New Materials for a lump-sum cash consideration of Rs 245 crore on a going-concern basis.

Morita had already infused Rs 77 crore through a preference allotment, Neogen said. The transfer consolidates the lithium-ion electrolyte salt undertaking under Neogen Morita New Materials, while planned joint-venture funding remains a separately disclosed source of support for the Dahej Phase 1 and Pakhajan Phase 2 projects.

What is Neogen's battery-chemicals revenue during the ramp-up?

Neogen Ionics reported revenue of Rs 37 crore in Q2 FY27, up from Rs 5.4 crore in Q2 FY26. That increase came as Neogen's consolidated revenue reached Rs 296 crore in Q2 FY27, a 42% year-on-year increase, with battery chemicals identified as a Rs 37 crore component of the total.

Neogen reported consolidated earnings before interest, tax, depreciation and amortisation of Rs 45 crore for Q2 FY27, up 51% year on year. The company said the result included initial fixed-cost absorption at Neogen Ionics while revenue scale-up and capacity utilisation were still ramping, as well as costs related to capital expenditure, tolling arrangements and the Dahej rebuild.

Consolidated profit after tax was Rs 8 crore in Q2 FY27, up 144% year on year, while earnings per share were Rs 2.96 and were not annualised. Management said higher interest and depreciation costs from ongoing capital expenditure temporarily affected profit, and expected interest expense to decline with term-debt reduction using QIP proceeds and lower borrowing costs following the credit-rating upgrade.

Conclusion

Neogen's disclosed programme combines a Rs 428 crore Dahej Phase 1 project and a Rs 1,367 crore Pakhajan Phase 2 project, with Rs 1,537 crore of cumulative capital expenditure against a Rs 1,795 crore estimate. The company has commissioned its 2,000-MTPA Dahej electrolyte plant, progressed salt capacity through commissioning and trials, and reported provisional approvals from five international salt customers.

The next stated milestones are commissioning of the new 1,000-MTPA salts and additives capacity and 500-metric-tonne intermediate facility in H2 FY27, followed by Dahej Phase 1's February 2027 target and Pakhajan Phase 2's March 2027 target. Customer validation of electrolyte products, joint trials with five to six giga factories and the planned joint-venture partner funding remain unresolved items disclosed in the update.