Recent Price Movement and Market Context
On 8 December 2025, Neogen Chemicals’ share price touched Rs.1033, the lowest level recorded in the past year. This price point represents a notable contraction from its 52-week high of Rs.2414.9, indicating a decline of over 57%. The stock has been on a downward trajectory for five consecutive trading sessions, cumulatively falling by approximately 8.6% during this period.
In comparison, the broader Sensex index opened flat but moved into negative territory, trading at 85,472.48 points, down 0.28% from the previous close. Despite the Sensex being close to its 52-week high of 86,159.02, Neogen Chemicals has underperformed its sector and the market benchmark. The stock’s day change was recorded at -1.35%, underperforming the specialty chemicals sector by 0.59% on the same day.
Technical indicators show that Neogen Chemicals is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This positioning suggests a persistent bearish sentiment among market participants over multiple time horizons.
Financial Performance and Profitability Metrics
Over the last year, Neogen Chemicals has recorded a total return of -52.27%, contrasting with the Sensex’s positive return of 4.61% over the same period. The company’s financial results have reflected subdued performance, with profits declining by 12.7% year-on-year.
Recent quarterly results have shown a contraction in profitability. The Profit Before Tax excluding other income (PBT less OI) for the latest quarter stood at Rs.3.26 crore, representing a 78.0% reduction compared to the average of the previous four quarters. Similarly, the Profit After Tax (PAT) for the quarter was Rs.3.37 crore, down 68.5% relative to the prior four-quarter average.
Return on Capital Employed (ROCE) for the half-year period was recorded at 5.72%, indicating limited efficiency in generating returns from capital investments. The average Return on Equity (ROE) over recent periods has been 9.65%, signalling modest profitability relative to shareholders’ funds.
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Debt Levels and Valuation Considerations
Neogen Chemicals carries a relatively high debt burden, with a Debt to EBITDA ratio of 4.01 times. This ratio suggests a considerable level of leverage relative to earnings before interest, taxes, depreciation, and amortisation. The elevated debt servicing requirement may be a factor influencing the stock’s recent price movements.
The company’s valuation metrics indicate a premium relative to its capital employed, with an Enterprise Value to Capital Employed ratio of 2.1. Despite this, the stock is trading at a discount compared to the average historical valuations of its peers within the specialty chemicals sector.
Operating profit growth over the past five years has averaged 14.16% annually, reflecting moderate expansion in core earnings. However, the recent negative results for two consecutive quarters highlight challenges in sustaining profitability momentum.
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 underscores the stock’s relative weakness within the broader market and its sector.
Institutional investors hold a significant stake in the company, accounting for 30.38% of shareholdings. These investors typically possess extensive resources and analytical capabilities to assess company fundamentals, which may influence trading activity and valuation dynamics.
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Summary of Key Challenges
The stock’s decline to Rs.1033 reflects a combination of factors including subdued profitability, high leverage, and valuation pressures. The recent quarterly results showing sharp reductions in profit margins have contributed to the cautious market sentiment. Additionally, the stock’s positioning below all major moving averages signals a continuation of the current trend in the near term.
While the broader market indices maintain a relatively positive stance, Neogen Chemicals’ performance remains subdued in comparison. The company’s financial metrics suggest that it faces hurdles in generating robust returns on equity and capital employed, which may be influencing investor perceptions.
Overall, the stock’s movement to a 52-week low marks a significant milestone in its recent trading history, underscoring the challenges faced by the company within the specialty chemicals sector.
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