HDFC Securities raises the target price of this multibagger specialty chemical stock

The Government of India has announced a 2 billion Production Linked Incentive (PLI) scheme to support manufacturing and localization of Advanced Chemical Cell (ACC) production units with the aim of localizing the supply chain.

“The company has made a huge leap forward to capitalize on the opportunities inherent in manufacturing lithium-ion batteries and ACCs. Currently, the company is manufacturing these lithium salts for non-electrolyte applications,” the note states.

Buy Rating of Brokerage House multibagger stock Comes with a target value of from the particular chemical locus 2,150 per share (from 1,470 earlier).

As a highly integrated company, Neogen Chemicals will sell both lithium salts and electrolyte formulations. HDFC Securities believes that, over the next 5-6 years, the company will wisely invest in electrolyte formulation manufacturing and enhancing organic chemical business capabilities.

Neogen Chemicals manufactures specialty organic bromine-based chemical compounds as well as specialty inorganic lithium-based chemical compounds. The specialty chemicals stock has outperformed this year (Year-to-date or YTD) by delivering multibagger returns even as the scrip has gained over 128% in the one-year period as compared to the last six months. 80% is up.

“The ramp-up in capacity utilization of the organic chemicals facility at Dahej recently tripled will fuel near-term growth. EPS will more than triple in FY24E. In addition, the Electrolyte Formulations business will continue to play a key role in driving the growth momentum. the company has raised 2.25 billion by issuing equity shares on a preferential basis. The brokerage note further said that equity investments have helped the company improve its balance sheet.

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.