NEOGEN CHEMICALS LTD.
ISIN: INE136S01016 • Market Cap: ₹6,377 Cr
The 5-Pillar Quality Audit for NEOGEN CHEMICALS LTD.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (16.6%), Return on Capital Employed (6.8%), and equity compounding (3.5%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 1.63 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (10.3%) and 3Y PAT CAGR (-0.5%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 179.33 vs PEG of 2.33 and Dividend Yield of 0.0%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 53.0%, backed by 23.7% institutional ownership.
Key Fundamental Strengths
Consistent Market Standing (Mid Cap)
Established player in the Chemicals sector with an overall fundamental quality score of 46/100.
Areas to Watch & Potential Risks
Subdued Capital Efficiency (ROCE: 6.8%)
A sub-12% ROCE suggests return on capital barely exceeds the company's weighted average cost of capital (WACC).
Elevated Financial Gearing (D/E: 1.63)
Debt-to-Equity exceeds 0.9x, meaning substantial operating earnings are absorbed by mandatory interest coverage.
Priced for Perfection (P/E: 179.33)
A steep valuation multiple of 179.33 leaves little margin for safety against quarterly earnings misses.
Quantitative Strategy Eligibility
Checking NEOGEN against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 46/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Valuation multiple or return metrics require further cyclical pullback.
Chemicals Sector Peer Comparison
Compare NEOGEN directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| NEOGEN CHEMICALS LTD. (NEOGEN)Current | 46/100 | ₹6,377 Cr | 179.33 | 6.8% | 1.63 | — |
| Solar Industries India Ltd. (SOLARINDS) | 80/100 | ₹1.79 Lakh Cr | 89.97 | 30.2% | 0.23 | View |
| Pidilite Industries Ltd. (PIDILITIND) | 75/100 | ₹1.68 Lakh Cr | 63.40 | 28.7% | 0.01 | View |
| SRF Ltd. (SRF) | 73/100 | ₹76,329 Cr | 35.31 | 15.2% | 0.36 | View |
| Coromandel International Ltd. (COROMANDEL) | 72/100 | ₹60,148 Cr | 32.83 | 21.6% | 0.07 | View |
| Linde India Ltd. (LINDEINDIA) | 61/100 | ₹57,146 Cr | 104.59 | 12.2% | 0.00 | View |
Frequently Asked Questions: NEOGEN CHEMICALS LTD.
Q:What is the 5-Pillar Fundamental Score for NEOGEN CHEMICALS LTD. (NEOGEN)?
NEOGEN CHEMICALS LTD. has a RupeeTools Fundamental Score of 46/100, placing it in the 'Caution / Risky' category. Its pillar scores are: Profitability (43/100), Financial Health (39/100), Growth (42/100), Valuation (38/100), and Ownership Quality (78/100).
Q:Is NEOGEN fundamentally strong for long-term investment?
NEOGEN currently holds a moderate quality rating of 46/100. While it operates in the Chemicals sector, investors should monitor its debt health before initiating long-term positions.
Q:Does NEOGEN pass the Coffee Can Investing filter?
No. NEOGEN does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does NEOGEN compare against other Chemicals peers?
Within India's Chemicals sector, NEOGEN trades at a P/E of 179.33 and generates an ROCE of 6.8%. Compare its 5-Pillar score of 46/100 against top sector peers like Solar Industries India Ltd. (80/100), Pidilite Industries Ltd. (75/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.