Buy Neogen Chemicals; target of Rs 800: Anand Rathi

Anand Rathi 's research report on Neogen Chemicals

Supported by strong user-industry demand and better utilisation, Neogen’s Q2 revenue and EBITDA grew respectively 6% and 5% y/y. We are positive on the long-term outlook for the company and expect revenue/EBITDA/ PAT to clock 32%/34%/49% CAGRs over FY21-23, driven by coming expansions, rising demand for pharma and agro intermediates and focus on value-added products. Further, the company entered into long-term contracts, providing future revenue assurance.

Outlook

We are upgrading our recommendation on the stock to a Buy with a target of Rs800 (earlier Rs660), valuing it at 27x FY23e EPS.

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