Neogen Chemicals Limited has informed the Exchange about update on fire incident.
NEOGEN · price
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Neogen Chemicals has received a second on-account insurance payment of Rs. 30 crore for the fire that damaged its Multi-Purpose Plant (MPP3), warehouse and tank farms at the Dahej SEZ facility on March 5, 2025. Total on-account insurance claims received so far stand at Rs. 80 crore. The company has recognized a total loss of Rs. 348.16 crore (standalone) / Rs. 362.90 crore (consolidated) from the incident, with an insurance claim receivable of Rs. 334.60 crore, resulting in a net loss of Rs. 13.56 crore after accounting adjustments. Production at the affected facility remains suspended, with reconstruction expected to take 9-12 months. The company has shifted critical specialty products production to other sites and is expanding the Patancheru plant to minimize earnings impact, and has maintained its earlier revenue guidance.
The additional insurance payout is positive for cash flow and helps offset the massive Rs. 348+ crore loss from the fire. However, the 9-12 month production suspension at the Dahez facility remains a drag on near-term volumes, though management's product shifting and Patancheru expansion plans aim to cushion the impact. Net loss to the company is largely contained at Rs. 13.56 crore thanks to insurance coverage, which should limit long-term shareholder damage.