BackThis multibagger specialty chemical stock gets a 'Buy' rating from from ICICI Securities
The brokerage has retained BUY rating on the multibagger stock on the back of better growth outlook from custom synthesis business
PremiumNeogen Chemicals manufactures specialty organic bromine-based chemical compounds as well as specialty inorganic lithium-based chemicals compounds. The specialty chemical stock has outperformed by giving multibagger return this year (year-to-date or YTD) so far as the scrip has rallied over 135% in 2021.
The stock appreciated at 90% CAGR in last two years. Brokerage firm ICICI Securities has set a new upside target for the multibagger stock as it has retained its Buy recommendation on the back of better growth outlook from custom synthesis business. It sees Neogen Chemicals shares to rise to ₹2,160 per share (target price) in twelve months period.
“The company foresees significant opportunities emerging in advance intermediates, custom synthesis and advance chemistry cells for lithium ion batteries. The objective of this fund raise is to support the company’s growth and to capture the upcoming high potential opportunities in these segments. This should inch up return ratios and thereby valuations in medium term," the note highlighted.
Phase 1 and Phase 2 capex at Dahej bodes well for advance intermediates and custom synthesis revenue growth, higher share of value added business portfolio to improve margins profile of the business, allocation of incremental FCF towards organic/inorganic growth likely to expand return ratios further could act as key triggers for future stock price performance, as per ICICI Securities.
Neogen chemical is going to issue equity shares on preferential basis worth ₹225 crore. The company's board has decided to issue up to 16.04 lakh equity shares of face value of ₹10 each at a price of ₹1,402 per equity share aggregating up to ₹225 crore on preferential basis. The group of investors remain SBI MF, Axis MF, Plutus wealth and White oak.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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