Neogen Chemicals Ltd (NSE: NEOGEN) Q3 2026 Earnings Call dated Feb. 12, 2026
Corporate Participants:
Harin Kanani — Managing Director
Gopikrishnan Sarathy — Chief Financial Officer
Analysts:
Unidentified Participant
Arun Prasath — Analyst
Rohit Nagraj — Analyst
Meet Katrodiya — Analyst
Pratham Kankariya — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the QT FY26 earnings conference call of Neogen Chemicals Ltd. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing then zero on your touchstone phone. I now hand the conference over to Mr. Nishit Solanki from CDR India. Thank you. And over to you sir.
Unidentified Participant
Thank you. Good afternoon everyone and welcome to Neogen Chemicals Q3FY26 earnings conference call for analysts and investors. Today we are joined by senior members of the management team including Mr. Anurag Surana M Non Executive Chairman, Dr. Harin Kanani, Managing Director and Mr. Gropi Krishnan Sarathi, Chief Financial Officer. We will commence the call with opening thoughts from the management team after which we’ll open the floor for your questions. Before we begin, a standard disclaimer. Certain statements made or discussed on today’s conference call may be forward looking. Actual results could vary from these forward looking statements and a detailed disclaimer is available in Q3FY26 earnings presentation which has been uploaded on stock exchange websites.
With that, I would like to invite Dr. Harun Kanani to share his perspectives. Thank you. And over to you, sir.
Harin Kanani — Managing Director
Thank you. Nishit. Good afternoon everyone. Thank you for joining us to discuss our third quarter fiscal 2026 financial results. I trust you had the opportunity to review our investor presentation. I will provide a summary of our operational performance and an update on our key strategic growth initiatives. Q3 served as a period of steady recovery and a decisive pivot towards a future ready portfolio for Neogen. Despite global market volatility, our core business remains robust underpinned by demand resilience in pharma, flavors and fragrance and other specialty applications. With our product optimization initiatives at the initiative and the Dahij replacement plant nearing completion, we are firmly on track to achieve our growth ambitions before our CFO provides a detailed financial overview.
Here is a quick summary. On a consolidated basis, we delivered 9% revenue growth in Q3 with a gross profit up 13% with around 150 basis points margin expansion. While top line growth was strong, EBITDA and PART were pressured by transient costs related to Neogen Ionics ramp up, elevated operational expenses due to fire incidents and interim toll manufacturing setup and higher finance cost from Dahesh plant reconstruction and other investments. These are short term impacts as we pivot to a future ready portfolio. Furthermore, eligible costs will be recovered. At least part of the eligible cost will be recovered through loss on profit insurance claims in the coming quarters, mostly in the next financial year.
Regarding the fire Incident, we received INR 83.48 crores in insurance claims till 9 months FY26. Accordingly, net claim receivable stands at INR 251.12 crores. We are maintaining a close dialogue with insurance to expedite the final settlement of the remaining balance. Concurrently, construction and replacement plant of DAHED is progressing rapidly with commissioning on track for Q1FY27. We are confident this new facility will be fully compliant and optimized for enhanced operational efficiency. Moving to update strategic expansion initiatives on battery materials Strategic Indo Japan alliance for Electrolyte Salt Production we have successfully concluded a joint venture with Japan’s Morita Investment Ltd.
To produce and sell LIPF6 salt globally. Neogen will hold an 80% majority stake in the new entity Neogen Morita New Materials Ltd. Supported by a 20 million investment from our partner. For the rest of the stake, the JV integrates 30 years of proven Japanese technology to accelerate international customer approvals and production efficiency. Notably, this establishment is India’s only non FEOC compliant electrolyte salt plant with proven established technology offering a strategic alternative to Chinese supply chain while advancing Atmanirbhar Bharat through significant import substitution. To give you an update on our Pakhajan Greenfield project, Our Pakhajan greenfield project is progressing on schedule with commercial production for electrolyte targeted for H1FY27 and electrolyte salts for H2FY27.
This timeline is strategically synchronized with India’s ACC battery rollout and the surging global demand for non FEOC compliant supply chains at the facility. Plant equipments have arrived, assembly is currently underway and trial production is expected to commence shortly. We have already achieved a major milestone by securing long term commercial supply approval from a prominent giga scale Indian manufacturer following successful PPAP completion. On the international front, we have received provisional approval of our lithium electrolyte source from multiple global clients. Now while final site audits are expected to be concluded in Q1 FY27 upon commissioning, Neogen will emerge as highly cost competitive global source for lithium salts and electrolytes backed by proven Japanese technology.
We are currently seeing significant tailwinds from the US 45x tax credit’s non FEOC requirements and recent price volatility in China, both of which enhance our appeal as a strategic global partner. We expect several large scale international customers to finalize their approval process shortly, paving the way for bulk consignments and regular commercial productions in H1FY27. Looking ahead, we are at a pivotal inflection point as we transition from project execution to the commencement of regular long term supply agreements. We are confident that Neogen Ionics will become the cornerstone of our future growth, diversifying our revenue streams and enhancing our margin profile.
By integrating world class Japanese technology with our indigenous manufacturing experience, we are enforcing Neogen’s position as a technology led leader within the global battery chemicals value chain. As the electric vehicle and energy storage ecosystems evolve, our readiness to supply material at scale position us to capture substantial market share delivering long term sustainable value to our stakeholders. That concludes my opening remarks. I will now turn the call over to our CFO Mr. Gopikrishnan Sati to provide a review of our financial performance for the period. Over to you.
Gopikrishnan Sarathy — Chief Financial Officer
Thank you. Thank you, Dr. Kannani. Good afternoon everyone. Welcome to Neogen Chemicals Q3FY26 earnings call. I will share the financial highlights. Please note all the numbers are on consolidated basis. Our revenue for Q3 reached 220crores representing 9% year on year growth. This was led by higher volume across both organic and inorganic chemical segments reflecting the steady market demand. Notably, we maintained resilient operating volumes despite temporary capacity bottleneck at our DAHED facility. These were effectively mitigated through strategic toll manufacturing arrangements. Additionally, neogen ionics contributed rupees 12 crore to the quarter’s revenue. As we continue to scale our battery chemicals vertical, breaking down our performance by segment, Organic chemical revenue reached 187 crores, a steady 6% increase in year on year.
Our inorganic chemical segment showed even stronger momentum delivering rupees 33 crore in revenue, a 35% growth compared to the same period last year. EBITDA for this quarter stood at 32 crores demonstrating sequential resilience despite several transitionary headwinds. On a year on year basis, our performance was impacted by temporary cost factors. Specifically the operational overheads as we scale up at Neogen Ionics and following the hedge fire incident. In the additional interim toll manufacturing expenses. This was incurred mainly to keep the customer supply on during the plant reconstruction. We view these short term costs essential to protecting our market share and preparing our future growth.
As highlighted by Dr. Kanani. The near term pressure from these transitionary cost will be balanced by insurance claim recoveries. Under the loss of profit policy, we reported a profit after tax of rupees four crore for the quarter Year on year variance is primarily attributable to the increased interest expenses Related to our capital expenditure at Dahij alongside the front loaded expenditure at Neogen Ionics as it prepares for the large scale commercial production. Turning to the corporate update, Reflecting their deep confidence in the long term, growth trajectory Board has granted in principle approval to raise up to 150 crore via preferential issue of equity share to the promoter.
This infusion underscores that unwavering commitment to Neogens expansion and provides financial flexibility to accelerate our growth initiative. This preferential issue is subject to the necessary regulatory approval. That concludes my remark. I will now request the moderator to open the forum for Q and A. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Abhijit Akela from Kie. Please go ahead.
Unidentified Participant
Yeah, good afternoon. Thank you so much for taking my questions. Could we please just start with the update on the gross and net debt balance at December and also maybe some. Color on the working capital trends. It does seem like the inventory DSOs and receivable DSOs have increased during the quarter based on the, you know, numbers given at the back in the tables. So just what exactly were the reasons for these and what our outlook is for improvement on that front.
Harin Kanani
Hi Abhijit, thanks for your question. Yes, there’s a increase bit in the inventory as well as for in terms of receivables, I think the receivables is basically in line with the increase in the business and overall what we expect. As we said that you know, this year, I mean the debtors and the creditors as you said will be more or less matching each other and in terms of inventory there will be little bit of increase this year because we are first like you know, right now we are working in multiple like multiple external vendors and we also want to build in a little bit of inventory because we want to stop the external vendors by end of the year and we want to start internal production in Dahedj in the first quarter.
So when we start internal production in the beginning the plant is just ramping up. So that is the time where we want to ensure that even if there is a slight delay in production or ramp up, we’re building up little bit of the inventory by end of this year so that we can take Care of the next quarters. I think as you know our Dahej plant starts and streamlines in the second half of the year. Inventories should. Inventory should come online and we maintain our target that you know once we have a full utilization in the next financial year.
By end of next financial year our inventories would be at around 140 to 160 days is what we are targeting on the inventory side. And as you said debtor creators usually depending on whether more international or more domestic sales the debtors are usually between 60 to 90 days kind of a range by end of the year and that’s what we would like to target. And generally debtor and creditor levels we’ll try to keep at a similar kind of level.
Unidentified Participant
Yeah thanks Arimbhai. So just the gross and net debt numbers if we could share at December end.
Harin Kanani
Maybe. Gopi, do you have those numbers directly with you? Okay.
Gopikrishnan Sarathy
Hello. Which numbers you’re saying sir?
Unidentified Participant
Just.
Harin Kanani
Yeah I got a number here. So on the total debt, the gross debt that is. Sorry. So that date that we have today is around 680 crores on standalone basis and around 1150 crore, around 1175 crores on a console basis.
Unidentified Participant
Yeah thank you, thank you for that. Second thing Just on the you know receipt of the money from Morita towards their 20% stake in the JV. So by when do we expect to get that and also this 150 crore fresh allotment to the promoters by when would that money be expected to come in?
Harin Kanani
There are four non business flows which are like non operational flows which are significant which are coming. Let me share with you that. So on the insurance front we are very close to getting another 60 crores against our like the rebuilding as a second interim payment against the rebuilding against the CapEx loss. So that is expected within this week. It was actually supposed to happen but there was just some last time procedural issues between the insurance companies which slightly delayed. So we are expected around 60 crore within this week and the main stock claim between 150 to 170 crore is expected before end of March.
So that’s around 210 crore which is going to be expected here in reference to the 20 million which we are expecting. So we have to basically request our bankers because the entire project was part of one. So now we are taking the bank’s permission to separate it out as two different entities. So that is in progress. As soon as that is received we can complete the rest of the formalities transfer the asset to the subsidiary Neogen Morita and then we can receive the equity from our partner. So that will be towards the end of current quarter and depending on the final timing, maybe either this year before March or little bit in April.
But basically by Q1 we should receive money from there and finally the 150 crore by the promoter. So our intention is to basically put the money before end of March. However like you know there’s some regulatory approval which is needed because there were some transfers like during trust formation from my father and mother to the respective trust. So we are just seeking a clarification. So depending on the regulatory approval, either it will happen before March or it will happen in Q1. But in the worst case, like you know by Q1 next year we would have 150 crore from the promoter, we would have around 200 crores from the partner as well as you’d have at least 200 odd crore from insurance.
So we expect around 550 crore to come either in this year or in Q1 next year.
Unidentified Participant
Understood. No, that’s a very helpful color. Thank you for that. Just last couple of ones if I may. If it’s not too much one is on the salt order receipts. So obviously I think in the presentation and your remarks you mentioned that things are moving well and we are somewhat close to receiving the order. So if you could please just put. Some more color around it. Exactly what the status of things is. And by when we expect to see. Some meaningful shipments happening there.
Harin Kanani
So as we said in our opening remarks that you know lot of people have shown very strong interest, right. Both like you know in the regulated larger customers as well as non regulated like you know, guys who will buy just one time or two times or something like that. So those, those sales have already increased and that’s why you can see the like smaller but like in terms of value wise significant increase in terms of our year on quarter, on quarter kind of sales increase on the salt business. However, like you know for me the biggest important point is that while we have one customer with whom now you know, we have completed majority of the requirements.
So they have now started working on the final timelines for the approval. As we had said, you know we will expect that by Q1 that to happen but in parallel three to four other customers who as we had said discussed earlier have already started taking samples or some of them have started approving our samples. And because of what is happening in lithium, even our intermediate like the simple lithium salt also we have received very strong inquiries. So we feel unfortunately you know, just the approval Cycle is such that some of these have already approved our samples.
They plan to do audits, let’s say in the month of March, April, May and then maybe if we have something to basically do some corrective actions based on that. So we expect by June our dahead site should get audited and approved. And by the time, as you can see, you know, majority of our capacity also will be coming online. So that like you know, once these capacities come online from Q2, Q3, Q4, we can see good SALT related revenues coming from Dahed. And in case of Pakhajan also we are trying to speed up the salt so that like you know, by Q2 financial years by September is when we said like we have said second half.
But we want at least trial production to start in first half so that we can start the validation process and maximum by December we try to get the Pakhajan site also approved so that we can take the maximum benefit of the 2027 requirement. So I would say Dahed site should be fully qualified through several customers by June, that is Q1 by end of Q1 and sales should start in Q2. And Pakhajan we are targeting in the second half but our target would be to complete it by Q3 so that it starts contributing in the sales from Q4 in the next financial year.
Unidentified Participant
And just on the capacity addition slide, you know, the 1100 tons to be commissioned at the hedge, the timeline is now mentioned as March 26th, I believe last quarter it was December 25th. So any particular reasons for maybe, you know, sleep of three months.
Harin Kanani
So basically you know, our team had a training session with Morita team. So our team actually went to Morita’s plant team and had a hands on training session and during that, you know, they picked up some of the improvements which we could further do. So we are basically implementing that. So majority of it is almost ready. But we just wanted and we also had some one of the other plants, we also had some slight design change which we carried out in the additive production part of that. So I think just that some changes in that design for further improvements that we were implementing.
So it went March anyway. Still we have not received the approval. So we felt it is good to get them done now rather than, you know, start and then again stop. So that’s the reason why we decided to complete them now and complete the expansion by now.
Unidentified Participant
Thanks. Just one last thing from my side one is, you know there was some news articles recently regarding the fact that one of the largest potential customers of yours who could set up battery capacities in India has kind of put their plans on the back burner because of lack of Chinese know how or technology that they could source. So any thoughts on that? And the other thing just to add in quickly, bromine prices have been very strong in recent times. Has that had any impact on our business in terms of realizations and is it possible to just break out the volume versus price for this quarter for organic and inorganic? Thank you so much.
Harin Kanani
Sure. So first you know about like maybe customers like specific customer which you mentioned. See we have not received any such communication from the customer and we basically continue to discuss with the customer how we can meet their demands. And those discussions continue on the second side, on the second point about bromine being strong. So majority of this has been. See again it’s not a very big difference but I know for example in case of lithium, in case of organolithium we have a volume slight volume increase and in case of organic derivatives it’s very difficult to give you volume because the product mix changes quite a bit.
So overall there is a volume growth. Yes, but it’s like you know, because of the product mix really that volume growth doesn’t tell you too much. But specifically with regards to bromine prices remaining it’s not changed too much of our business because usually majority of our bromine is contracted for a longer period of time and with our customers also we have contracts. So you know basically from one contract to another it kind of gets material. So unless you have like a 2 times, 3 times increase in bromine we really don’t see a big impact related to that.
Unidentified Participant
Thank you, Thanks a lot. All the best.
operator
Thank you. The next question is from the line of Arun Prashad from Avendus Park. Please go ahead.
Arun Prasath
Good afternoon Dr. Harin, thanks for the opportunity. My first question is, you know I’m just reflecting back to our commentary in the previous call that we said that some of the past stage of approvals for result the your customers will be visiting your facility in February, this January or online and then the final approval. Now we are once again talking about the timelines three to four months down the line. So they will just understand why this repeated delay in the approvals. I understand they have bit more time to comply with the regulatory requirements but what is actually causing this continuous deferment of the approval time? That’s my first question.
Harin Kanani
Yeah, so basically you know already the we had said by Jan Feb we will be ready with all the modifications which they need post which you know they will do the online or Visit. So basically that is today the status. So we are today in the middle of fab and we are right now completing and what. And we are basically intimated that yes, we have carried out more of all the changes. So we keep discussing with them like you know, every alternate week. So they said, okay, we will let you know like what is going to be our action plan going forward.
So whether they will come within one, two weeks, whether they will come in three weeks, I don’t know. But we were supposed to be ready by Jan and Feb, which is what we are ready. And now, you know, they can come anytime. And what I told by June is not only the existing customer, but even the other customers also who are like now approved, even they are likely to complete their. So some of them started late, right? And even these guys now are saying, okay, I will come for an audit in April or March or something.
So by June, what we are expecting is all the, even the new customers also should complete.
Arun Prasath
And then for this new customers also, this is a final leg of the audit or it is just a beginning.
Harin Kanani
No, no, final, final. Of course they can come and say, hey, I want a plan which is similar to your Pakajan plant. So that’s a call which they will take once they finally come and do. I can’t predict that. Right. But yeah, I mean that would be the audit. If they come, they are satisfied, then no, we can start. And then some of them say, oh, you know, Pakhajan is going to be a much better, much bigger plant because it’s designed from scratch. Maybe we’ll just wait six months and take it from Pakhajan so that can happen.
But many of them right now are showing urgency to buy now. So we hope that they will start buying from Dahil and then move over to Pakhajan afterwards. So after three or four, maybe one or two will go this way. The other may say, okay, I’ll wait for Pakhajan and then start. Because anyway, the capacity that we have in the hedge also is relatively limited.
Arun Prasath
Right, right. And we also,
operator
sorry, Mr. Arun, maybe. Requested you if you can mute yourself when management is answering because there is a disturbance which we can hear from Elaine sir.
Arun Prasath
Sure, sure, we’ll do that.
operator
Please go ahead.
Arun Prasath
Yeah. Doctor, we also heard that few of your US customers are going through some restructuring where the OEMs earlier had the entered into the JV and the electron, they are backing out. Does it concern you that at this stage this kind of restructuring is happening which may potentially again delayed approvals or, or something like that?
Harin Kanani
I think maybe you are talking of GM and Ford, you know, doing some JV changes etc. We are not affected by any of those. Yeah.
Arun Prasath
Okay. And does it mean that the OEM going forward so you will have two layers of approval. One from. Hello.
Harin Kanani
Yeah, can you go ahead? Yeah, sorry.
Arun Prasath
So. So does it also reduce your potential clients from say earlier you might have a mix of clients between OEMs and battery manufacturers and now potentially OEMs backing away from the directly being a stake the manufacturing. So we will be having a reduced pool of such customers is the right way to look at it?
Harin Kanani
No. So Arun, basically you know you have to think that majority of the OEMs or these JVs are basically OEM is self producers. So basically what happens is when you’re thinking of electrolyte intermediate which is Lips 6, the two main vendors are cell producer and the electrolyte maker. So these are the two people who have to approve you. Okay. And the cell. And of course in some cases, you know the cell producer also will be an oem. And as I explained that you know as compared to before where we had okay maybe one company, right who was contract who had contracted with Neogen in.
In in the future now with, I mean not in the future with the Morita JV that we have done. There are several more who are interested. So actually our market in a way with the JV has expanded and more customers are available to us as compared to earlier.
Arun Prasath
Okay, understood. Understood sir. Second, you spoke about various fundraisers which is going to be happen across in the next six months. Roughly 6 and 5 to 600 crores. This will be largely utilized for the working capital requirements as we scale up the business because most of your capexes anyway you have already tied up. So. So is it the case or will be again going for the separate working capital loan? How should we look at this?
Harin Kanani
So whatever money we are raising, right. So part of it will. So some of it would of course be like for example the JV money which to is going going to come that will be partly used for completing the capital projects, right? Because there also there’s some contributions needed. Like you know, as you see our total debt as I explained earlier is not. We’ve not utilized all the term loans fully. So there’s some contribution required from us. So partly it will be for that contribution, partly will be for of course working capital deduction and it’s all not fundraise.
That’s the money which is going to come in whether it is from insurance. The second is from the jv and the third is from what we currently propose, promoter infusion.
Arun Prasath
And our first interest payment. That is a moratorium that that still we have few quarters away. Right. And for a principal repayment.
Harin Kanani
Yes, yes. So yeah. So for whatever loans we have in the hedge like you know let’s say if we are completing in Q1 so then the first principal repayment will be Q1 of FY28. And like you know in case of Pakajan. Right. It will be like we have right now said H1. So for example if we are seeing H1, FY27 is when it start when we H1, FY27 when we start then H128 would be the equivalent first repayment after that. So basically one year from the start of the plant from the SEOD.
Arun Prasath
Okay. All right sir. Thank you very much. All the best.
Harin Kanani
Thank you.
operator
Thank you. The next question is from the line of Rohit Nagraj from 361 Capital. Please go ahead.
Rohit Nagraj
Thanks for the opportunity. So first question is in terms of our guidance for FY27 and beyond. So we had indicated that we’ll be having about 400 to 500 crores from the battery chemicals part of the business. However there have been slight delay in terms of commissioning of the project in terms of approvals. So do we stand with the same guidance or we would like to revise it for FY27 and maybe that will fall back even on FY28. Thank you.
Harin Kanani
No, our guidance remains the same. Because you know the guidance the expectation was that our Tahit site will be fully ready by June. And our expectation that we will start having sales of this from basically Q1 and majorly from Q2 onwards. So that remains same. So therefore our guidance doesn’t change. We have right now not considered the Q4 sales from Pakhajan So that we have basically kept as a backup like in case if you know there’s some further delay or so that that would be like a additional sales which will happen just our dahed sales and whatever expected electrolyte demand should be able to allow us to reach the original target.
And whatever we do Q4 either in case if there is any slip up from the hedge, that will be the Q4 salt sales will be contributor of that or that will be then an additional one which will be up over and above what we have done.
Rohit Nagraj
That’s helpful. And on the neogen Ionics, the Morita jv. So how this entire deal has been structured so effectively valuing the JV at $100 million. So what is the current infusion by Neogen in terms of equity as well as debt? And there’ll be another $20 million which will come from Morita. Given that we have 1500 crores of total investment plan for this, how the equity participation and the debt will look like and when the entire investment has been made.
Harin Kanani
So basically you know we are still discussing on the with the banks on. So one thing which is very clear is 80% is going to be. 80% is going to be Neogen’s portion. 20% is going to be Morita’s portion. We are still discussing with the banks on like you know exactly the debt equity ratio which we have once we do the separation, we are hoping it they will maintain at the same 70, 30 level. So depending on that like you know we will basically whatever is the balance which is not controlled contributed by the bank will be in the form of the equity.
Some of this has already been contributed in the form of equity. So I think it’s better that you know, I’ll be able to give a better clarity on this once we have the final clarification from the banks. Once you know, the loans are separated and we are able to take it separately.
Rohit Nagraj
Right, right. Just one clarification. So effectively next year when Bahead starts generating the revenues there will be a 20% minority interest for the stake equity stake of Marita. Is that right? Understanding?
Harin Kanani
No, not in Dahaj. No Dahej there is no Dahaj is hundred percent Neogen. Only the Pakhajan site is going to be through. Pakhajan site is going to be through Monitor.
Rohit Nagraj
Okay and can you just split up in terms of Pakajan site what could be the potential revenues in FY27 and maybe longer term in FY29.
Harin Kanani
So in. So again in Pakhajan the salt business will be if the question is from that point of view. So the Pakhajan side is going to be for Morita. The only the salt part will be Morita and the H and the electrolyte will continue to remain with nil. So in FY27 as I explained earlier that currently we have not considered significant sales because it will be in Q4 we have kept as a bonus. So majority of what since we have given will be largely nil sales. Maybe you know, some of that would be rooted through NML because you know, ultimately the.
For example the salt in the international business is going to be sold by the jv. But like you know that from a revenue point of view I think majority of this would be annual for FY20. If you talk of FY29 see FY29 is a bit tricky because it depends on how much of the salt we are consuming internally and how much of the salt we are selling in the international market. Now that depends on how the international market develops beyond the initial years and the desire to have a China free supply chain etc. And the second is how the Indian customers choose whether they want local supply of LIPF 6 or they want like lower cost or like, you know.
So it depends on that. So actually if you see if we have to take care of our existing international customer demand as well as, you know, in Neogen’s own internal consumption, then basically we would need more capacity for the salt because the current capacity of the salt is not going to be enough. We’ll have to add capacity. But I think that those clarity and that’s a decision will take somewhere towards end of FY27 or FY28 to take care of the FY29 demand. So because India electrolyte demand is still developing in FY27 and 28, the existing salt, the capacity will be sufficient to take care of both.
But by FY29 if we have to take care of both international as well as local consumption, then we need to add more capacity. So I think it’s little bit difficult for me to tell you in FY29 how the breakup will be.
Rohit Nagraj
Sure this is helpful. Thanks a lot for answering all the questions and all the best. Thank you.
operator
Thank you. The next question is from the lion of Meet Katsodia from Navisha. Please go ahead.
Meet Katrodiya
Yeah, good afternoon team. Thank you so much for the opportunity. Sir, one question on the US side if Chinese origin salts get restricted from let’s say 2027 so is Signal that US customers think about re buying and storing inventory in 2026 and then start using it in 2027.
Harin Kanani
To meet. There are two things, right? I mean see the batteries which are made in 27 cannot be using Chinese. So it’s not about buying, it’s about making batteries which are not containing, you know, the material. So it doesn’t help them to store and use that. It’s not like a custom duty which is going to come up, right? So it’s a different. So it’s on the usage. So therefore that is not happen. The second thing is the way things stand today right now, you know, with Chinese prices, sometimes China is even more expensive. Third point is even if you wanted to store and use usually the Shelf life is not more than six months even at electrolyte salt stage.
So I don’t think they can store store too much of it.
Meet Katrodiya
Answer Also when customer talk about reducing channel dependence, so how does it actually play out in practice? Let’s say do they typically start off phase, dual sourcing, ramp up or ahead of the time? Let’s say they will start from Q3, Q2, Q3 of 27 onwards or when you can see the major ramp up from us customers. Got an idea.
Harin Kanani
So there are two types of customers, right? There are some customers who are cautious who started working with us two years before and like preparing for it. There are few customers who are basically saying that yes they would like to have a ramp up. So they will have Q2, some quantity coming from Neogen, then Q3, then Q4 and then maybe next year, you know, further quantity. So there are some customers like that, there are some which are very price sensitive. So of course now last two months, you know, the things change. But till that time they said till Q4 we will audit you, we will validate you, everything we will keep ready.
And Q4 is when we make the switch, right? Because that is what is regulatory driven. So it’s completely. So there was one customer who was more regulatory driven. There were some customers who wanted to be cautious, wanted to gradually scale up. Other customer says approval is very complicated. So first do Dahesh, then again do Pakhajan. So I will start only directly from Pakajal. So it’s kind of like a mix of those and some of these also keep changing because they had some different response when the Chinese prices were very low three months ago. Now they have another response where they said okay, before I said I will buy only from Pakajit but now okay, maybe I can consider the hedge also.
So let me start approving the hedgehog. So all this is like you know, changing customer to customer and again depending on the market situation.
Meet Katrodiya
It’s a very helpful. And the last one based on the latest online negotiation with customers and ecosystem players in India in rough indication actual what can be the actual salary capacity operational by let’s say end of 2026. And and how that number look up to you in 2027?
Harin Kanani
You you in calendar year 26 and 27.
Rohit Nagraj
Yeah, right.
Harin Kanani
Sorry, what was the question again? I said you said something India. The voice was not very clear.
Meet Katrodiya
Yeah, yeah, yeah. I I asked that based on your maybe negotiation with customers and ecosystem player in India for the battery cell manufacturing. So any rough integration how much actual cell capacity can come online by let’s say end of calendar in 2026. And how, how does that number look in 2027?
Harin Kanani
You’re saying cell manufacturing capacity, right?
Meet Katrodiya
Right, Right, right, right. Battery cell. Right.
Harin Kanani
Okay. Battery cell man. So battery cell. You know, if you see right now what we have to go by, whatever. So Ola has announced to go from 1.5 to 5 giga. Then you have a 3 giga which is starting off excite and 4 giga which is starting from 4 giga which is starting from Body Energy. So this, if you look at that, so between them, technically you should be having around 12 gigawatt hour of production which will be coming online in the current year, right? And by end of this year you should have a 12 giga.
Let’s say if we say 12 giga and if the ramp up happens, okay, every month, for example, one giga kind of a consumption should be reached by let’s say end of December 26th. Right? So the actual consumption may be somewhere between actual production, maybe like 3 giga or 5 giga or 6 giga depending on how it ramps up. But when you enter 2027, you enter with a 12 giga of already installed installed capacity. And sorry, and to this you may have to add like you know, then whatever Reliance has announced and Amaraja has announced and Tata has announced.
So if you think of their original starting capacities also what they wanted to do. So Reliance intention was to reach up to 40 giga in one year from start. If you look at Amaraja, I think the starting capacity was I think around 2.5 or 5 giga. And Tata’s. Tata has not announced the starting capacity. So if you add all of that, you know, you should be let’s say at least about 25, 30 giga by end of 2027 as we enter 2028. And of course by the time you know, you might. And, and sorry and sorry.
You also need to add that by the time if Ola further in the capacity or Worry’s intention to increase capacity from 4 to 20 or Amaraj or Excite’s plan to increase from 3 giga and beyond. So sorry, I think by end of 27 we should be, if everything goes well, by end of 27 we should be 4050 giga plus entering into 2028 based on whatever customers have shared.
Meet Katrodiya
Got it? Answer one. One question. Let’s say I was working with many players. Everyone is in a view that everyone will prefer to have two suppliers, right? One primary and another maybe secondary. Also let’s Say if in India, let’s say Bari wants to have a two supplier. So, so what is the let’s say mode or maybe the USP of Neogen that it can be a primary supplier as compared to our competitor. So just want to understand what are the that Neogen pitch to Vari or maybe other guys also that they prefer to have Neogen as a primary supplier.
Harin Kanani
So I think one is, you know, we are already ready. So we already have 3, 4 years experience to make it in the lab and supply successfully and last one or two years even from a commercial plant in Dahij. Second is we have Mitsubishi collaboration. So like you know these are some of Mitsubishi is known to be the best electrolyte producer in terms of quality. So then you can be 100% be sure about the quality of the supply. And the third is you know we have the backward integration. So I think and the fourth is we have actually capacity because one of the things is, you know we, you need to have the capacity right now we’ll have a 30 gigawatt hour worth of capacity which will be ready let’s say so that nobody has to worry about whether Neogen can supply enough quantity or not.
So I think these three, four things make Neogen in a positive note. And just for your reference, not everybody in Electrolyte has always two suppliers. I know historically many companies where one single supplier if they feel the risk they will ask the same supplier to keep multiple plants. But sometimes they can have one single supplier exclusively. So two suppliers is not always a necessity in case of electrolyte.
operator
Sorry to interrupt. May we request Mr. Meer to please rejoin the queue. We have participants waiting for the turn. Thank you. Ladies and gentlemen, we would request you to please limit your questions to two per participant. If you have a follow up question you may rejoin the queue. The next question is from the line of Nilesh Koge from HDFC Securities. Please go ahead.
Unidentified Participant
Yeah, hi, good afternoon Hareem. My question is on our CDMO and Advanced Intermediate business. So how much was the contribution from these two business verticals in nine month FY26? And how is the progress and the inquiries in CDMO and advanced intermediate business? Any guidance on that for FY27?
Harin Kanani
So Nilesh, thank you so much for asking me also question other than battery. So appreciate that. No, so I think three DMO and Advanced Intermediate we are slightly better as compared to last year. And like you know, actually for the first six months, nine months we were actually ahead as compared to last year. But whatever POS which we had with our customers we completed and like you know now some of the new revised repeat POS people are waiting especially on the CDMO site for the new site to come online. So already customers we have shared our progress with the customers and maybe by end of this month or from March onwards customers will start visiting and we expect so we expect again some you know, repeat orders or like new projects which are kind of on hold.
We can start achieving orders against that. But overall I think you know we will expect that as we go. Let’s say this year if you look at the run rate, you know we are at around 800 plus kind of a revenue and as we go from 800 plus to 950 or so we feel CDMO will be one of the significant areas contract manufacturing CDMO and Advanced Intermediate will be a significant, significant area where we’ll have growth. If you if I were to just look at nine months numbers they are basically it has been same as compared to the previous nine months as against CDMO and contract manufacturer Advanced Intermediate and.
CDMO
Unidentified Participant
despite our Daesh facility is not there, right?
Harin Kanani
Yeah, despite so some of like there was one semiconductor customer that required a specialized equipment so they had enough inventory so we had to skip. We couldn’t do this year. So despite Dahij not being there, you know we were able to maintain the same levels but most of these products we were able to do from Mahape and Karkadi some we couldn’t do so we couldn’t register the growth there but we were able to maintain.
Unidentified Participant
And just secondly on this tool manufacturing arrangement that we made because of non availability of a darage facility. So what percentage of revenue is currently coming from that and when we are ready with our Dahesh facility. So do you expect some margin expansion because you are shifting from tooling model to in house production?
Harin Kanani
Yeah. So you know currently some of the high, higher costs that you are seeing will reduce. Right. As we move from so like your other expenses will change a bit where whatever is the tolling related expenses there will kind of go away. Of course some of it will come in the form of additional power and fuel kind of expense at our DAIS plant. But net of what we feel is you should have improvement in our cost structure.
Unidentified Participant
Just how much business currently we. Are doing through our tolling model that we can shift to our in house production.
Harin Kanani
So basically it’s very difficult for me to say because you know in some cases I’m just doing one stage there. In some cases like so it’s. It’s not that. Okay, completely it has been done. Right. So but basically we are using it on a need basis, right? And you can basically say that we are able to maintain our current revenues because of several sites. We are not using this one site. There are several sites which we are using in different ways. So like, you know, just like most of it, whatever we want to use it will be done by March and April onwards.
You know, our Dahesh plant will start getting available partially maybe by end of June we feel it will be fully available. So with the inventories that will build up and the first quarter the way once the production I think we should be okay. And then let’s say Q2 onwards you should not see we’ll have a stable production. So one, you know, as we try to get like let’s say 950 crore. So our quarterly run rate also improves to like 225 to 250 crore kind of range in the next financial year. As well as some of the tooling related expenses will go down.
And also our insurance premium also it’s, you know the first year is toughest. So that is from July to July. So once that July gets over. So from next year like maybe Q2 or Q3 onwards you have Dahaj which is fully stabilized. You have like at least the worst of the insurance is over, right? And the tolling arrangement cost is also gone. And hopefully by that time you know the hedge also will be contributing from Q2 Q3 onwards to significantly on the battery material side. So that’s when you know you’ll have good improvement in our performance.
Unidentified Participant
Okay, thanks. Thanks. Thanks a lot and all the best.
operator
Thank you. The next question is from the line of Pratham Kankariya from Quantum Asset Management. Please go ahead.
Pratham Kankariya
Yeah, hi sir, I’m Audible. Hello.
Harin Kanani
Yes.
Pratham Kankariya
Yeah, so just I had one question on the inorganic segment. So if I just exclude the neogen ionics revenue. The trend has been on the downward side for the inorganic chemical segment. So if you can just present your views. What is the cause for this? Is this solely attributed to the downward lithium prices? But now that also has spiked up. So just wanted to get your view.
Harin Kanani
Yeah, so it’s solely attributed to the downward lithium side and the spike impact. We’ll see maybe little bit in Q4 but more in the next year if the spike is maintained. So because till Q like you know the lithium prices started increasing by November, December, I mean almost towards December. And in January you saw majority of the increase to happen. So the material from there will hit me By March or April, right. So before that you will not see a big.
Pratham Kankariya
Okay, sure. But sir, still revenue has come on the lower side solely attributed to the price. Right?
Harin Kanani
Yeah, yeah.
Pratham Kankariya
Okay, sure, sure. Thank you. That’s it.
operator
Thank you. The next question is from the line of Jason Sones from IDBI Capital. Please go ahead.
Unidentified Participant
Yeah, sir, thanks for taking my question, sir. Now probably it’s a given that Pakhajan will ramp up only in H2FY27 as you mentioned. Now just accounting for that, sir, would we able to, you know, clock in 400, 500 crores from battery chemicals in 27, you know, accounting for that and any approximate revenue estimations for 28 as well.
Harin Kanani
See, basically, you know we have considered very limited from the salt sales of Pakajan, right? Because we said it’s in H2 so electrolyte will be stable in H1. And as I answered earlier, that increase in capacity of Ola excite like getting stable. Then you know, we said even worry starting. So maybe we can expect some electrolyte like you know, revenues coming in the second half from you know, these people ramping their operations up. So that is what something which we have considered. And as I explained that, you know, we said, okay, the salt in Pakhajan will come in H2.
So technically we have not considered any sales although we are on track that at least in Q4 we can get some sales. But I have right now kept it as a backup that in case because this year, you know, from the time we got listed first time, like you know, whatever revenue projections we had given, we had to make a significant correction. So I’m little bit more careful. So what we have done is that Q4, whatever Pakhajan salt sales we have not considered. So in case, you know, if Dahej is slightly delayed or electrolyte is not delayed, the Q4 salt sales will allow me to basically make up for that so that we don’t go wrong on our guidance in the next financial year.
So that’s kind of on that. And I think FY28, it’s too early for me to give a number. But one thing which looks very strong to me is that our salt capacity should be utilized at 80% or more, you know, because that is something which is, which will be in a very strong demand. And of course if I sell it in the form of electrolyte, it will be higher. So if I look at today’s market price and you know, if you think of 5,500 tons of total salt capacity and if you think of a 80% utilization even on that.
Right. So that’s around 4400 at 20 plus kind of a dollar price. Right. Salt and added is even higher. So on an average price about $20 it’s very like, you know if this assumption is valid then you would have a thousand crore plus kind of revenue. And of course whatever I sell in the form of electrolyte that’s further value addition. So therefore it, it should ideally be beyond thousand crores. Like you know, it should be something. But how much beyond is little bit before, little bit difficult for me to tell you now.
Unidentified Participant
Sure, sure. But at least for the initial estimate we said 400, 500 crores. We are sticking to that for 27 for battery chemicals.
Harin Kanani
Yeah, yeah. There’s no change. Yes, there’s no change.
Unidentified Participant
Yeah, yeah because you said you are right because electrolyte at least will be stable and at least will be able to garner some volumes from the electrolyte side.
Harin Kanani
Yeah. And we know I’m seeing electrolyte sales. Unfortunately I’m dependent upon how my customers start their plant. You know there’s not something which I can do beyond. So that’s why I’ve kept the Pakhajan Q4 as a backup where anything we do over performance there can be a backup in case you know India electrolyte demand doesn’t shape up as much or in the beginning approvals in the Hajj are delayed. So we can kind of make up for that apps.
Unidentified Participant
Sure, sure, sure sir. And sir, just if, if you could tell me, I mean 30,000 is what you are clocking in at Pakhajan which will come on streaming. I’m only talking in terms of electrolytes. So by H1 how much will be online? Sir, from the 30,000 empty
Harin Kanani
the way. The plant is because you know we are doing a joint trial with, with Mitsubishi. So our idea is that the entire 30,000 there are three lines and all the three pipeline will be tested and we will be ready for the 30,000 ton kind of annual capacity which is monthly like you know around 2,500 tons. But of course you know we will take care of the operational side that you know if we don’t see the, and we don’t see in the first year business visibility. So in terms of banning our people or some other expenses we will kind of do it gradually but the plant will be ready for the entire 30,000 today.
Unidentified Participant
Okay. Sure, sure, sure sir. And sir, just in terms of revenue growth from the base business which gets talked about less right now nowadays so just to understand, in 27 and 28, you know, 26 was subdued. I understand the fire thing and everything is there, but with 27, you know, can we expect double digit revenue growth? Especially with the Dagg plant coming on track post the fire? So just wanted to know for organic, inorganic, how do you expect the base business? Can we expect a double digit revenue growth there?
Harin Kanani
Yes.
Unidentified Participant
Okay, sure. And just lastly, sir, I just wanted to understand in terms of this QIP, this 150crores as you mentioned, just a little bit unclear on this. So the 150 crores is basically, you know, is it the promoter group is going to increase the stake or is it just a regular qip which is done? Just wanted some clarity on that.
Harin Kanani
No. So this is a prep allotment. So basically we felt that, you know, that okay, you know, Neogen could help with the equity. We know the insurance money is also coming. The equity is also coming. But as I said, you know, there’s a good salt demand also. So we felt that, you know, in case, suppose if we have to do a little bit more on the salt or additive or as well as in the interim, you know, if we had that equity, then that would really help Neogen to seamlessly continue and like, you know, make sure that all our execution in 2026 happens seamlessly.
And that was the whole idea. So we as a promoter group decided to invest 150 crore. But as I said, you know, there’s this one clarification we need to take because my father and mother had formed a trust which was a family trust. And you know, Sebi already gives a permission that this is like, it’s like a promoter and promoter group. But just because of that there has to be some cooling off period. So whether that is needed or not. So we are just taking some regulatory guidance on that. But otherwise the idea was to bring in 150 crore in the company before March.
So that will also like, you know, reduce the interest burden and also give us a lot of flexibility on things that we want to do.
Unidentified Participant
But that comes in from the promoter group, is that right? So our stake which is right now at 51.22% that increases basically in the company.
Harin Kanani
That’s right. Yes, that’s right.
Unidentified Participant
That’s right. Okay, that’s great, that’s great. And just, just one last thing. This insurance claim money, I understand you said Morita is fine. That will take some time. 150 crores from the promoter. It is in Q1FY27, this insurance claim said this 200 crores for the stock claim by. When can we get this?
Harin Kanani
See, see. So 60 crore is expected maybe today, tomorrow like you know, within.
Unidentified Participant
Okay, okay.
Harin Kanani
Because the insurance company had already taken all the documents from us for release of the 60 crore. We had the agreement this is the second interim against rebuilding the plant. Right. So we have to stock and rebuilding the plant. So again rebuilding the plant. They are ready to issue 60 crore at any given point of time. There are five insurance companies. So they all have to pull into the lead insurer and the lead insurer transfers the money to us. So that process is ongoing. But that should happen anytime. Then you know, the stock claim was also like in case of the stock claim the insurance company had appointed like a third party, big four kind of auditor.
So that is about. So their process is almost complete. They should finalize the report based on that. Surveyor should finalize the report and like based on that the money should ideally be released before March. But like maybe it can slip up. So that’s why I said March or April. But we are working very strongly now with the insurance that look we have built the whole plant. In fact if everything happens we can even ask for the third interim again because you know this should still be 140 crore. So we can still ask for one more interim release before March.
But at least these are the two which I am currently taking. And then of course in the next year as I explained earlier that the rebuilding cost is going to be more than the loss. Right. So the balance material which is left against the rebuilding plant as well as the higher rebuilding costs. So that has to be assessed and that has to be released and the loss on profit has to be assessed. So that is something in my view, you know the first part, the balance on the stock. I’m sorry, the balance on the capital rebuild should happen before September and maybe the loss on profit should happen somewhere between September to December.
So in a way everything from the insurance ultimately hopefully should be achieved by December. September to December. Next.
Unidentified Participant
Okay, thanks. Thanks for answering my question. Thank you.
Harin Kanani
Yeah,
operator
thank you. Ladies and gentlemen, this will be the last question for today which is from the line of Pratham Kankaria from Quantum Asset Management. Please go ahead.
Pratham Kankariya
Just small thing. What would be the ceiling on capacity utilization on the salt electrolytes once we fully ramp up?
Harin Kanani
You mean utilization wise. So yeah, so normally salt would be at 80%. It’s like a chemical plant. In case of electrolyte it is a formulation plant. So you can go up to 100%.
Pratham Kankariya
Okay. Sure, sure. Thank you.
operator
Thank you. Ladies and gentlemen. As that was the last question for today, I would now like to hand the conference over to management for closing comments.
Harin Kanani
Thank you all for your time and participation today. We trust we have addressed your queries. Should you have any further questions or require additional clarification, please reach out to our Investor Relation team. We appreciate your continued support and look forward to updating you on our progress again next quarter. Thank you once again. Have a great day ahead.
operator
Thank you on behalf of Neogen Chemicals Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.