Neogen's battery project cost swells 20% to ₹1,795 cr, Dahej slips to Feb 2027
The battery materials subsidiary's capital outlay has jumped from ₹1,500 cr. The standalone business guides ₹875-950 cr for FY27.
What's new
- Battery materials project cost revised to ₹1,795 crore, a 20% jump from the ₹1,500 crore estimate.
- Dahej Phase 1 project completion pushed to February 2027.
- Standalone revenue guidance for FY27 is ₹875-950 crore.
Why this matters
A 20% cost overrun on a project that hasn't produced revenue yet changes the return-on-capital calculus. The delay to February 2027 pushes cash-flow breakeven further out, while the ₹161 cr promoter infusion and expected $20M from Morita only cap debt growth—they don't reduce the total investment.
What we're watching
- Whether the ₹1,795 cr cost is now final or subject to more revisions.
- Customer qualification progress at the Pakhajan greenfield site.
- Timing of the remaining $20M equity infusion from Morita.
The full read
Neogen Chemicals' battery materials bet just got more expensive. The project cost at subsidiary Neogen Ionics has been revised to ₹1,795 crore, a 20% jump from the earlier ₹1,500 crore estimate. The increase comes from integrating Japanese technology and adding intermediate capacity. Compounding the capital pressure, the Dahej Phase 1 project completion has been pushed to February 2027. The standalone business, which excludes battery materials, is guiding revenue of ₹875-950 crore for FY27, with the Dahej replacement plant due in June 2026. The ₹161 crore promoter infusion and an expected $20 million equity contribution from partner Morita are meant to cap peak debt. But a 20% cost escalation on a project yet to generate revenue changes the return math. The standalone revenue anchor is stable. The battery story is now both more costly and slower to deliver.
Questions answered
- Why did the battery materials project cost jump 20%?
- Management attributed the ₹295 crore increase to integrating Japanese technology and adding intermediate capacity at Neogen Ionics. The revised total is ₹1,795 crore.
- What is the new Dahej timeline?
- Dahej Phase 1 is now expected to complete by February 2027. The separate Dahej replacement plant for the standalone business is on track for commissioning in June 2026.
- How is the company funding the higher capex?
- A ₹161 crore promoter infusion has already occurred. Management also expects a $20 million equity contribution from partner Morita, which it says will keep peak debt levels unchanged despite the higher project cost.
- What is the core business revenue guidance?
- Excluding battery materials, standalone revenue is guided at ₹875-950 crore for FY27. Battery materials revenue is targeted at over ₹300 crore, weighted toward the second half.