Neogen Chemicals revenue rises 42%, profit drops sequentially

Neogen Chemicals Limited reported consolidated revenue from operations of Rs 295.96 crore for the quarter ended September 30, 2026, 42% above Rs 208.66 crore a year earlier. Profit for the period rose to Rs 8.23 crore from Rs 3.37 crore, although it declined from Rs 17.11 crore in the preceding June quarter as expenses increased.

How did Neogen Chemicals perform in the September 2026 quarter?

Neogen Chemicals recorded year-on-year growth in both revenue and profit for the quarter ended September 30, 2026. Revenue from operations increased by Rs 87.30 crore to Rs 295.96 crore from Rs 208.66 crore in the September 2025 quarter, while total income rose to Rs 299.92 crore from Rs 210.55 crore. Other income was Rs 3.96 crore, compared with Rs 1.89 crore a year earlier.

Profit for the period was Rs 8.23 crore, up Rs 4.86 crore from Rs 3.37 crore in the year-earlier quarter. Profit before tax increased to Rs 12.72 crore from Rs 5.15 crore, and basic and diluted earnings per share, not annualised, rose to Rs 2.96 from Rs 1.28. Total comprehensive income was Rs 7.29 crore, compared with Rs 3.26 crore in September 2025.

The half-year results also remained ahead of the comparable prior period. For the half year ended September 30, 2026, Neogen Chemicals reported revenue from operations of Rs 546.25 crore against Rs 395.38 crore in the half year ended September 30, 2025. Profit for the period increased to Rs 25.34 crore from Rs 13.65 crore, while total comprehensive income rose to Rs 24.57 crore from Rs 13.45 crore.

Why did Neogen Chemicals’ profit decline from the June 2026 quarter?

Neogen Chemicals’ September-quarter profit declined sequentially because the rise in operating costs exceeded the increase in income. Revenue from operations increased by Rs 45.67 crore from Rs 250.29 crore in the June 2026 quarter, but profit before tax fell by Rs 10.56 crore to Rs 12.72 crore. Profit for the period consequently declined by Rs 8.88 crore from Rs 17.11 crore.

Cost of materials consumed increased to Rs 234.88 crore in the September quarter from Rs 180.03 crore in June. Employee benefits expense rose to Rs 30.96 crore from Rs 25.30 crore, finance costs increased to Rs 27.78 crore from Rs 20.81 crore, and other expenses rose to Rs 56.23 crore from Rs 42.99 crore. Total expenses were Rs 287.21 crore, compared with Rs 231.07 crore in the preceding quarter.

Changes in inventories of finished goods, work-in-progress and stock-in-trade provided a negative expense of Rs 71.43 crore, compared with a negative Rs 47.00 crore in June. Depreciation and amortisation expense was Rs 8.79 crore against Rs 8.20 crore, while Neogen Chemicals’ share of profit of associates declined to Rs 0.01 crore from Rs 0.20 crore. Current tax was Rs 6.29 crore, compared with Rs 6.03 crore in June, and deferred tax was a credit of Rs 1.80 crore rather than an expense of Rs 0.14 crore.

What changed in Neogen Chemicals’ balance sheet and cash flow?

Neogen Chemicals’ total assets increased to Rs 4,005.17 crore as of September 30, 2026, from Rs 2,901.87 crore on March 31, 2026. Capital work-in-progress rose by Rs 330 crore to Rs 1,187.12 crore, while property, plant and equipment increased to Rs 546.16 crore from Rs 410.14 crore. Inventories also increased to Rs 752.60 crore from Rs 568.23 crore.

Cash and cash equivalents reached Rs 444.46 crore on September 30, 2026, compared with Rs 4.94 crore at March 31, 2026. The increase followed Rs 741.45 crore of net proceeds from share issuance during the half year, including Rs 161 crore from a preferential issue and Rs 580.45 crore from a qualified institutions placement, or QIP, net of share issue expenses. Equity increased to Rs 1,577.51 crore from Rs 816.25 crore.

Operating cash flow remained negative during the six months ended September 30, 2026, at Rs 126.84 crore, though this was lower than the Rs 246.11 crore outflow in the comparable prior-year period. An inventory increase used Rs 184.38 crore of cash, while capital expenditure on property, plant and equipment totalled Rs 419.64 crore. Net cash used in investing activities was Rs 389.50 crore, compared with Rs 113.35 crore a year earlier.

What is the status of Neogen Chemicals’ Dahej plant fire insurance claim?

The insurance claim related to the March 5, 2025 fire at Neogen Chemicals’ Dahej Special Economic Zone plant remained under assessment as of September 30, 2026. The company had recognised Rs 362.90 crore of fire-related loss and Rs 348.82 crore of insurance claim receivable in the year ended March 31, 2025, reporting the net Rs 14.08 crore amount as an exceptional item.

The auditor’s report states that Neogen Chemicals had received Rs 155 crore as on-account payment from the insurer and realised Rs 9.49 crore from scrap sales by September 30, 2026. The company had also incurred and claimed Rs 1.41 crore of additional expenses, leaving an insurance claim receivable of Rs 185.74 crore at the reporting date. The report says the insurer subsequently advised that an additional Rs 152 crore would be released as part payment, while management considers the balance claim fully recoverable.

Chandabhoy & Jassoobhoy reviewed the unaudited consolidated results for the quarter and half year ended September 30, 2026 and reported no matter that caused it to believe the statement was materially misstated. Its conclusion was not modified for the fire claim. The review covered the parent, three subsidiaries and one joint venture, while results of certain subsidiaries were reviewed by other auditors or were not reviewed because they were described as not material.

Conclusion

Neogen Chemicals delivered a 42% year-on-year increase in September-quarter revenue to Rs 295.96 crore and more than doubled profit for the period to Rs 8.23 crore. The comparison with June shows a different trend: revenue rose sequentially, but materials, employee, finance and other expenses lifted total expenses to Rs 287.21 crore and reduced profit from Rs 17.11 crore.

The next areas to watch are the utilisation of the Rs 741.45 crore raised through share issuance, the Rs 419.64 crore half-year capital expenditure and the remaining Dahej fire insurance recovery. As of September 30, 2026, the receivable stood at Rs 185.74 crore, and the auditor’s report disclosed that Rs 152 crore of further payment had been advised for release in due course.