Deepak Fertilizers And Petrochemicals Q3 Results: Profit Falls 76%

Deepak Fertilizers and Petrochemicals Ltd.'s net profit declined 76% in the third quarter of fiscal 2024.

The company's profit tumbled to Rs 60.53 crore in the October-December quarter, in comparison with Rs 252.3 crore in the year-ago period, according to its exchange filing.

• Revenue down 32.8% at Rs 1,852.6 crore vs Rs 2,754.8 crore.

• Ebitda down 38.8% at Rs 282.2 crore vs Rs 461.2 crore.

• Margin down 151 bps at 15.2% vs 16.7%.

• Net profit down 76% at Rs 60.53 crore vs Rs 252.3 crore.

Mining Chemicals, Technical Ammonium Nitrate (TAN):

Reflecting the resilience of the industry amid evolving market dynamics, production of coal, cement and steel grew by 14%, 7% and 10% year-on-year, respectively, which are key market indicators for the TAN business.

Despite the positive industry trend, overall TAN sales volume during the quarter declined by 15% YoY due to a surge in imports from Russia. The company continues to maintain competitive pricing across all segments.

Business Outlook: The government's gradual removal of the ban on exports of ammonium nitrate would help the company to export the top grade low density ammonium nitrate prilled product. Demand is expected to remain stable in Q4 FY24.

Pharma/Specialty Chemicals (Nitric Acid and IPA):

Nitric acid volume were impacted due to the scheduled plant maintenance during the quarter along with low demand from downstream industries due to imports of nitroaromatics from China.

Business Outlook: Indian pharma market volume expected to improve and prices are expected to be stable. New solar grade nitric acid plant has been commissioned and expected to have better volume.

Fertilizers (Crop nutrition business) Review:

Lower than average rainfall, limited water for irrigation in core markets, unseasonal rains and hailstorms have impacted sowing of key Rabi crops which has impacted sales volume negatively.

The company has recently launched crop-specific water soluble product Solutek for growing bananas, which is gaining acceptance among farmers. With the approach of ‘seeing is believing’, the CNB team has conducted 6,000 plus product demonstrations and engaged with about 5 lakh farmers through various market development activities to demonstrate product performance

Business Outlook: Skymet’s recent early predictions indicate normal monsoon for the current year, which would support a good fertiliser Kharif season.

Shares of the company closed 6.17% lower at Rs 580 apiece, as compared with a fall of 0.13% in the benchmark Nifty 50.