Recent Price Movement and Market Context
On 24 Nov 2025, Neogen Chemicals touched an intraday low of Rs.1118.5, representing a fall of 10.13% during the trading session. This decline contributed to a day change of -7.44%, underperforming the specialty chemicals sector by 5.53%. The stock has been on a losing streak for five consecutive trading days, resulting in a cumulative return of -13.44% over this period.
Trading levels for Neogen Chemicals currently sit below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This technical positioning indicates a persistent bearish momentum in the stock’s price action.
In contrast, the broader market index, Sensex, experienced a volatile session. After opening 88.12 points higher, the Sensex declined by 419.33 points, closing at 84,900.71, down 0.39%. Despite this, the Sensex remains close to its 52-week high of 85,801.70, trading just 1.06% below that peak. The index is supported by bullish moving averages, with the 50-day DMA positioned above the 200-day DMA, signalling overall market resilience.
Long-Term Performance and Valuation Metrics
Over the past year, Neogen Chemicals has recorded a return of -40.56%, a stark contrast to the Sensex’s positive 7.31% performance during the same period. The stock’s 52-week high was Rs.2414.9, highlighting the extent of the decline to the current low.
Valuation metrics suggest a challenging environment for the company. The Return on Capital Employed (ROCE) stands at 5.9%, while the enterprise value to capital employed ratio is 2.4, indicating a relatively high valuation compared to the company’s capital base. This valuation is considered expensive when juxtaposed with the company’s profitability and growth metrics.
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Profitability and Debt Servicing Concerns
Neogen Chemicals’ ability to generate returns on shareholders’ funds has been modest, with an average Return on Equity (ROE) of 9.65%. This figure reflects limited profitability per unit of equity invested. Operating profit growth over the last five years has averaged 14.16% annually, indicating subdued expansion in core earnings.
The company’s capacity to service its debt obligations is constrained, as evidenced by a Debt to EBITDA ratio of 4.01 times. This level suggests a relatively high leverage position, which may weigh on financial flexibility.
Recent quarterly results have shown negative profit after tax (PAT) figures for two consecutive quarters. The latest quarterly PAT stood at Rs.3.37 crores, down 68.5% compared to the previous four-quarter average. Additionally, the operating profit to interest coverage ratio for the quarter was 1.54 times, signalling limited cushion to meet interest expenses.
Comparative Performance and Market Position
Neogen Chemicals has underperformed not only the Sensex but also the BSE500 index over multiple time frames, including the last three years, one year, and three months. This underperformance highlights challenges in maintaining competitive positioning within the specialty chemicals sector.
Despite these headwinds, institutional investors hold a significant stake in the company, with institutional holdings at 30.38%. Such investors typically possess greater resources and analytical capabilities to assess company fundamentals.
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Summary of Key Financial Indicators
Operating profit growth at an annual rate of 14.16% over five years contrasts with recent quarterly losses, reflecting a divergence between long-term trends and near-term results. The company’s ROCE of 5.72% for the half year is among the lowest in its peer group, underscoring limited efficiency in capital utilisation.
Profitability pressures are further highlighted by a 12.7% decline in profits over the past year, coinciding with the stock’s 40.56% negative return. The stock’s valuation remains discounted relative to historical averages of its peers, suggesting market recognition of these challenges.
Neogen Chemicals’ current trading below all major moving averages and its recent 52-week low price of Rs.1118.5 reflect the prevailing market sentiment and the company’s financial performance over the past year.
Market Outlook and Broader Implications
The broader market environment remains mixed, with the Sensex maintaining levels close to its 52-week high despite intraday volatility. Neogen Chemicals’ divergence from this trend highlights sector-specific and company-specific factors influencing its share price trajectory.
While the stock’s recent performance has been subdued, the data points to a complex interplay of valuation, profitability, and leverage considerations shaping investor perceptions.
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