This article we can explore the possibility of Neogen Chemicals Ltd Ltd as a multibagger 2022 Stock based on Value Investing principles.
| Website | https://neogenchem.com |
| CMP | Rs. 1,590.00 |
About Neogen Chemicals Ltd
Neogen Chemicals Ltd. is a 30 year old company specializing in Bromine based compounds, Grignard Reagents and Inorganic Lithium Salts. This company was founded by Mr. Haridas Kanani, a chemical engineer from Indian Institute of Technology (IIT), Mumbai.
Over the years, Neogen has developed several Bromine based intermediates and is a leading manufacturer of these products. Their specialty chemicals product offerings are used in pharmaceutical and agrochemical intermediates, engineering fluids, electronic chemicals, polymer additives, water treatment, construction, aroma chemicals, flavours and fragrances, specialty polymers, VAM original-equipment manufacturers in India and across 28 countries (USA, Europe, Japan and Middle East) with over three decades of supply, quality reliability and track record with leading innovator and generic companies.
Neogen family has expanded to over 325 members as at the end of March 2021. The family comprises of technically qualified people with Ph. Ds. and Bachelors in Chemical Engineering. Apart from Bromination and Grignard chemistry, Neogen has also developed competencies in other related chemistries, such as, Alkylation, Acylation, Friedel Craft, Couplings and Chlorination.
Neogen functions out of its three state-of-the-art manufacturing facilities. These are located in Mahape, Navi Mumbai, Maharashtra, Karakhadi in Vadodara and Dahej SEZ in Gujarat. Neogen’s aggregate manufacturing capacity of inorganic chemicals has doubled, after the commencement of operation at its Dahej SEZ, Gujarat, plant in February 2020. After the inorganic chemicals capacity expansion, the Company expedited its construction activities at the Greenfield project for organic chemical production at Dahej SEZ. The initial trial of commercial production batches at its organic manufacturing facility at Dahej SEZ started in April 2021. Full scale commercial production of organic chemicals successfully commenced from September 6, 2021 at the Phase I of the new organic chemicals manufacturing facility at Dahej SEZ.
With the completion of the Greenfield facility at Dahej SEZ, Neogen is able to carry out multi-step synthesis in equipment of various sizes. Neogen is also focussing on Custom Synthesis and Manufacturing. Work has already commenced in this area with customers in Japan and Europe.
Apart from catering to the domestic market, Neogen has, so far, exported to 28 countries including USA, UK, France, Germany, Spain, Italy, Japan, Mexico, Canada, South Korea, Netherlands, Belgium, Switzerland, Sweden, Denmark, Greece, Poland, Czech Republic, UAE, Saudi Arabia, Israel, Egypt, Taiwan, Australia, Ireland and China. Among these, Europe (UK, Spain, France, Germany and Italy), USA and Japan remain our largest markets.
Products & Services
- Organic Chemicals
- Inorganic Chemicals
- Grignard Reagents
- Advance intermediates
- Chemistries
Profit & loss
Warren Buffett Checklist
| Factor | Value |
| Economic moat | Good |
| Growth | Good |
| Valuation | Bad |
| Debt | Bad |
| Integrity | Good |
Positives
- Company is expected to give good quarter
- Company has delivered good profit growth of 43.43% CAGR over last 5 years
Negatives
- Stock is trading at 20.19 times its book value
- Promoter holding has decreased over last quarter: -4.14%
- Company might be capitalizing the interest cost
Summary
As per the Expansion & Value Investing grounds the company is having Multibagger Properties.
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