Stock To Buy: This Stock Has A Potential Upside Of 26%, In 1 Year: ICICI Direct

Renowned brokerage firm ICICI Direct has recommended investors to buy stocks of Neogen chemical with a potential upside of 26%, within a target period of 1 year. Neogen Chemicals' stock price has appreciated at 90% CAGR in the last 2 years.

Target Price

The Current Market Price (CMP) of Neogen chemical is Rs. 3604. The brokerage firm, ICICI Direct Recommends has estimated a Target Price for the stock at Rs. 4220. Hence the stock is expected to give a 26% return, in a Target Period of 12 months.

Stock Outlook
Current Market Price (CMP)	Rs. 1721
Target Price	Rs. 2160
1 Year returns	26.00%

Company performance

Neogen chemical's net revenue stood at Rs. 336.4 crore, in FY 21, and the brokerage firm is expecting it is to grow Rs. 446.3 in FY 22. In FY 21 EBITDA stood at Rs. 64.4 crore rate which is expected to go at Rs. 87.0 crore rate in FY22. In the last 5 years, net revenue grew at 25.3% CAGR, and EBITDA grew at 35.5% CAGR.

Comments by ICICI Direct

ICICI Direct stated, "Neogen chemical's board has decided to Issue up to 16.04 lakh equity shares of FV of Rs. 10 each at a price of Rs. 1,402.12 per equity share aggregating up to Rs. 225 crore on a preferential basis. The company foresees significant opportunities emerging in advance intermediates, custom synthesis, and advance chemistry cells for lithium-ion batteries. The objective of this fundraising is to support the company's growth and to capture the upcoming high potential opportunities."

About the company

Commencing operations in 1991, Neogen Chemicals manufactures specialty organic bromine-based chemical compounds as well as specialty inorganic lithium-based chemicals compounds. The company's products find application in pharmaceutical intermediates, agrochemical intermediates, engineering fluids, polymers additives, and water treatment chemicals to name a few.

Disclaimer

The above stock was picked from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

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