Deepak Nitrite Limited., a Indian chemicals manufacturer announced its results for the second quarter ended Sept 30, 2022.
Q2 Results- QoQ
The company’s net profit declined 25.6% to Rs 1.74 billion for the period ended Sept 30, 2022 as against net profit of Rs 2.34 billion for the previous quarter.
Net sales decreased 4.5% to Rs 19.73 billion during the period ended Sept 30, 2022 as compared to Rs 20.67 billion during the previous quarter.
Q2 Results- YoY
The company reported 31.4% drop in net profit to Rs 1.74 billion for the period ended Sept 30, 2022 as against net profit of Rs 2.54 billion for the prior-year quarter.
Net sales increased 16.8% to Rs 19.73 billionduring the period ended Sept 30, 2022 as compared to Rs 16.89 billion during the prior-year quarter.
Advanced intermediates segment contributed a Rs 6.84 billion in revenue with Rs 1.38 billion EBITDA, while Phenolics segment posted Rs 12.84 billion with Rs 1.02 billion EBITDA.
The company stated that global uncertainity in Oil and Gas markets affected Benzene prices, a key raw material for Phenolics, resulting in low margins for the segment.
H1 Results- YoY
The company reported 26.5% drop in net profit to Rs 4.09 billion for the period ended Sept 30, 2022 as against net profit of Rs 5.56 billion for the prior-year 1st half period.
Net sales increased 25.3% to Rs 40.41 billion during the period ended Sept 30, 2022 as compared to Rs 32.24 billion during the the 6 months period last year.
Nadesari, Gujarat fire incident led to damage of certain property, plant and equipment, inventory and has interrupted business for which the company has completed all the necessary actions interms of insurance claim and re-start of operations. The company estimated an initial loss of Rs 472 million.
Commenting on the fire incident Maulik Mehta, CEO, Deepak Nitrite said, “The Nadesari plant of the company lost a 100% of production for one month, and upon receiving directions from various authorities, operations have been resumed in a phased manner from the, early July period, and full production capacity has been achieved in October. Hence, the results of the current period are not comparable to the previous period into that extent.”
“Also, I would like to highlight that for the month of July, operations at the Nadesari facility were made using the far more expensive natural gas rather than coal, which is historically the fuel of choice,” he added.
The Group has planned introduction of several downstream chemicals and complex chemical platforms which shall significantly diversify its operations adding to the existing wide range of value-added product mix. It has significant presence in value chain from basic intermediate to fine and specialty products to performance products through intergrated operations with process ranging from manufacturing basic intermediates to niche and complex intermediates, leading to high dependency on each other as most of the products are forward-backward integrated, serving varied end-user industries across all the geographies. This gives flexibility to focus on manufacturing products that enjoy encouraging demand and offer better price.
Plant Expansion
CapEx of Rs 15 billion for new plant capacities, 40,000 MT per annum of MIBC (Methyl isobutyl ketone) and 8,000 MT per annum of MIBK (Methyl isobutyl carbinol) have been planned. And also, capacities related to photo chlorination, chlorination, nitration and hydrogenation as part of downstream integration are planned.
Deepak Nitrite Limited is a leading player in the Indian chemicals sector engaged in the manufacture and sale of phenolics and advanced intermediate chemicals.