Small Cap Chemicals Sector Stock Jumps 466% Within 5 Yrs, Buy for 29% Gains, Says HDFC Securities

Leading brokerage firm HDFC Securities has placed a Buy Call on Neogen Chemicals Ltd. (NCL) for a target price of Rs. 1,925 apiece. If you buy the stock at the current market price, it is likely to give a return of up to 29%, considering the given target price.

Neogen Chemicals Ltd. is a chemical sector small-cap company. It is an over 30-year-old company specialising in Bromine-based compounds, Grignard Reagents and Inorganic Lithium Salts. It has a market valuation of Rs. 3,723.81 crore.

Value-added products rise in the mix

HDFC Securities said, "Our BUY recommendation on Neogen Chemicals (NCL), with a target price of INR 1,925/sh is premised on (1) increasing contribution of the high-margin CSM business to revenue; (2) entry into the new-age electrolyte manufacturing business; (3) capacity-led expansion growth opportunity; (4) constant focus on R&D; and (5) improving return ratios and strong balance sheet, going forward. Q4 EBITDA was in line with our estimate, whereas APAT was 14% below our estimate, owing to higher-than-expected finance costs and tax outgo."

Stock Outlook

The last traded share price of the stock is Rs. 1,493.15 apiece, up by Rs. 19.45 or 1.32% from its previous close. The stock traded the 52 week low on 6 February 2023 at Rs. 1,140 apiece and 52 week high on 12 April 2023 at Rs. 1,729.95 apiece.

It has fallen 1.63% in 1 week, and 7.02% in 1 month, respectively. In the past 1 year, it has given 7.8% positive return. It has given 232.44% positive return in 3 years. It has given 466.55% positive return since its listing. It was listed on 08 May 2019.

Disclaimer - The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.