Neogen Q2 revenue rises 42% as battery chemicals add Rs 37 crore

Neogen Chemicals Limited reported consolidated Q2 FY27 revenue of Rs 296 crore, up 42% year on year, as battery-chemicals revenue rose to Rs 37 crore from Rs 5.4 crore in Q2 FY26. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 51% to Rs 45 crore, while profit after tax reached Rs 8 crore.

How did Neogen perform in Q2 FY27?

Neogen reported consolidated revenue of Rs 296 crore for Q2 FY27 ended September 30, 2026, a 42% increase from Q2 FY26. The company attributed the increase to sustained volume growth in core segments and Organolithium expansion into emerging applications, despite Middle East geopolitical tensions, supply-chain disruption and higher feedstock costs.

Gross profit rose 36% year on year to Rs 133 crore, while EBITDA grew 51% to Rs 45 crore. Profit after tax, or PAT, increased 144% to Rs 8 crore, and consolidated earnings per share were Rs 2.96, not annualised, for Q2 FY27.

Neogen said the quarter's performance occurred while its Dahej facility was temporarily unavailable. Management said it shifted towards applications with better demand visibility and higher volumes, while the cost base included Dahej plant rebuilding and tolling arrangements, under which a third party performs production work.

What did battery chemicals contribute to Neogen revenue?

Neogen's battery-chemicals business generated Rs 37 crore of revenue in Q2 FY27, compared with Rs 5.4 crore in Q2 FY26. The increase was recorded during the accelerated scale-up of Neogen Ionics Limited, Neogen's wholly owned subsidiary for battery-material projects, and battery chemicals accounted for part of the Rs 296 crore consolidated revenue total.

The business remained in a ramp-up phase despite its larger revenue contribution. Neogen said consolidated EBITDA included initial fixed-cost absorption at Neogen Ionics because revenue scale-up and capacity utilisation were still progressing, alongside capital expenditure-related costs.

At Dahej, Neogen said its 2,000 metric tonne electrolyte plant was fully commissioned. Mechanical assembly was complete and trial runs had started, while facility validation and product approvals with domestic battery makers were under way; the company said it had received electrolyte recipes from five to six giga factories for joint trials.

For lithium electrolyte salts and additives, Neogen had commissioned 200 metric tonnes per annum, or MTPA, from an initial 1,500 MTPA project and shipped first approval material to customers. Another 1,000 MTPA was commissioned in Q2 FY27, trial production continued for the remaining 300 MTPA, and the company reported provisional approvals from five international customers and commercial supply to two customers.

Why were Neogen profits affected by higher costs?

Neogen said its Rs 45 crore EBITDA reflected a higher cost base from the Dahej plant rebuild, tolling arrangements, Neogen Ionics capital expenditure and elevated input costs. The 51% EBITDA increase exceeded the 42% revenue increase, but the battery-materials operation was still absorbing fixed costs as utilisation developed.

PAT of Rs 8 crore was temporarily affected by higher interest and depreciation expenses associated with ongoing capital expenditure, according to Neogen. Management said interest expense is expected to decline through term-debt reduction using qualified institutional placement, or QIP, proceeds and potentially lower borrowing costs after the credit-rating revision; this was an expectation rather than a reported Q2 reduction.

Neogen raised Rs 600 crore in its first QIP, which the company said was oversubscribed 6.5 times. It said the proceeds would support debt repayment, incremental business requirements and growth opportunities, while CRISIL Ratings revised the outlook on Rs 680 crore of long-term bank facilities and Rs 200 crore of non-convertible debentures to CRISIL A-/Stable from Negative and reaffirmed the short-term CRISIL A2+ rating.

What is the status of Neogen's Dahej insurance recovery?

Neogen reported cumulative Dahej fire-related recoveries of Rs 164 crore, comprising Rs 155 crore in on-account insurance claims and Rs 9 crore from salvage realisation. The insurance amount included a Rs 15 crore tranche received in July 2026, while the company also incurred Rs 1 crore of further incidental charges that it said were claimed under the insurance policy.

On October 29, 2026, Neogen accepted an additional Rs 152 crore claim amount from the insurer for release in due course as part-payment of total receivables. Including the accepted amount and salvage scrap sales, total on-account claims received or receivable stood at Rs 316 crore, with discussions on the remaining balance continuing as final assessments proceed.

Which Neogen expansion milestones come next?

Neogen's board approved expansion of Organolithium manufacturing capacity at Patancheru, Telangana, from 300 MTPA to 600 MTPA. The proposed investment is up to Rs 45 crore, with estimated additional revenue potential of Rs 150 crore to Rs 200 crore based on lithium prices, making the range conditional rather than booked revenue.

For battery materials, Neogen estimated total project cost of Rs 1,795 crore for Dahej Phase 1 and Pakhajan Phase 2, with cumulative capital expenditure of Rs 1,537 crore to date. Dahej Phase 1 was budgeted at Rs 428 crore with target completion by February 2027, while Pakhajan Phase 2 was budgeted at Rs 1,367 crore and expected to be completed by March 2027.

The company said a further 1,000 MTPA of lithium electrolyte salts and additives capacity, plus 500 metric tonnes of intermediate capacity, was due for commissioning in H2 FY27. Neogen also executed a business transfer agreement between Neogen Ionics and stepdown subsidiary Neogen Morita New Materials Limited to consolidate the lithium-ion electrolyte salt undertaking, including lithium hexafluorophosphate, for Rs 245 crore on a going-concern basis; Morita had infused Rs 77 crore through preference allotment.

Conclusion

Neogen's Q2 FY27 results show that battery chemicals became a material contributor to growth, delivering Rs 37 crore of revenue against Rs 5.4 crore a year earlier. Consolidated revenue rose 42% to Rs 296 crore and EBITDA rose 51% to Rs 45 crore, while rebuilding, tolling, input, interest and depreciation costs continued to affect profitability.

The next disclosed milestones are commissioning of additional battery-material capacity in H2 FY27, Dahej Phase 1 completion by February 2027 and Pakhajan Phase 2 completion by March 2027. Management also expects a substantial battery-chemicals scale-up from Q4 FY27 and beyond, while further Dahej insurance settlements remain subject to the insurers' final assessments.