Neogen Chemicals Q2FY26: Fire, Lithium, and Financial Alchemy — The ₹348 Cr Blaze that Burned the Margins but Ignited the Curiosity

1. At a Glance

In a plot straight out of a corporate soap opera,Neogen Chemicals Ltd (NSE: NEOGEN)— the lithium-laced darling of India’s specialty chemicals space — reported Q2FY26 results that made analysts double-check their calculators and insurance companies double-check their clauses. The stock closed at₹1,452, with amarket cap of ₹3,831 croreand aP/E of 117. That’s right — it’s trading at a valuation hotter than its own Dahej plant, which recently suffered a₹348 crore fire loss(yes, you read that correctly).

The company has already received₹80.9 crorefrom its₹334.6 crore insurance claim, but profits went up in smoke —Q2 PAT fell 69% YoY to ₹3.37 crore, even assales grew 7.9% to ₹208.66 crore. TheROE stands at 5.59%,ROCE at 8.82%, andDebt/Equity ratio at 0.76— because apparently, fire isn’t the only thing that’s leveraged.

Despite the chaos, Neogen continues to pour lithium — and cash — into capacity expansion, including its mega Dahej SEZ and the upcomingPakhajan plant. Frombromine chemistry to battery electrolytes, this is a company that’s been trying to turn the “specialty chemical” tag into “special narrative.”

So, what happens when a high-P/E, low-profit, capex-hungry chemical company faces a literal firestorm? Grab your safety goggles; we’re diving in.

2. Introduction

There are two kinds of chemical companies in India: those that quietly compound wealth, and those that set the market (and sometimes their plants) on fire. Neogen Chemicals proudly sits in the latter category.

Founded in1991, Neogen is the lab rat that grew up in India’s specialty chemical ecosystem — a company that began with bromine-based intermediates and today wants to power your electric vehicles and your pharma drugs at the same time. Fromorganolithium reagentstoelectrolyte salts, they’re not just selling molecules; they’re selling a futuristic dream — one lithium ion at a time.

But let’s face it — the dream is expensive. With a₹1,500 crore capex pipeline, a fire worth₹348 crore, and aP/E of 117, Neogen’s financials scream “science project meets venture capital experiment.” TheirPAT of ₹26 crore (TTM)feels like a rounding error in their balance sheet, but their ambitions are global:29+ export markets,246 products, and even aJapanese JV (Morita)for lithium electrolyte salts.

Yet, the stock is down31.5% over the past year, proving once again that chemistry can be volatile — not just in the lab, but also in the stock market.

So, the question is: can Neogen reinvent itself post-fire, or will it evaporate like an uncooled lithium cell?

3. Business Model – WTF Do They Even Do?

Let’s break it down before your eyes glaze over like a beaker of sodium bromide.

Neogen Chemicalsmakesbromine and lithium-based organic and inorganic compounds— these are used in everything frompharma APIstobattery electrolytes,agrochemicals,flavors & fragrances, andsemiconductors. If it smells, shocks, or cures something — Neogen probably supplies an intermediate for it.

They’ve gottwo key divisions:

• Organic Chemicals (84% of revenue):The bread and butter — bromine-based compounds and advanced intermediates for pharma and agri companies.
• Inorganic Chemicals (16% of revenue):Mainly lithium-based chemicals for specialty and energy applications.

Then comes the fun part:Custom Synthesis and Contract Manufacturing.This means if