Deepak Nitrite Ltd's standalone revenue for Q3FY19 came in at Rs452.3cr, up 21.9% yoy. The operating profit for the quarter came in at Rs66.2cr, an increase of 105.4% yoy. The EBITDA margin expanded by ~595bps yoy to 14.6% in Q3FY19. However, it dropped by ~130bps qoq. The net profit after tax increased by 55.5% to Rs31.6cr for Q3FY19. The revenue and net profit is in-line with estimates. However, the EBITDA missed the estimate of Rs73cr by 9%.
• The rise in revenue during Q3FY19 by ~22% yoy is driven by higher level of volumes across segments coupled with improvement in realization.
• The gross margin has expanded significantly by ~242bps to 44.3% in Q3FY19 on account of improved product mix and rise in the realization levels.
• Higher operating margin led to improvement in EBITDA margin by ~595bps to 14.6% in Q3FY19 despite significant increase in other expenses by ~57% yoy to Rs55.8cr during the quarter.
• Debt-Equity ratio dropped to 0.47x as on December 31, 2018 from 0.73x as on December 31, 2017.
• Phenol plant was commissioned on November 1, 2018 and has been ramped up above 80% in Q3FY19, contributing additional turnover of Rs321cr.
• Deepak Nitrite succeeded in replacing bulk of imports of phenol and acetone in the local market during the quarter.
• According to the management, abundant availability of locally produced Phenol and Acetone will boost the production of downstream intermediates. This would further diversify the product applications and expand the overall market size in the country.
Deepak Nitrite Ltd is currently trading at Rs. 220, down by 7 points or 3.08% from its previous closing of Rs. 227 on the BSE.
The scrip opened at Rs. 229 and has touched a high and low of Rs. 232.15 and Rs. 217.50 respectively. So far 71,308 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200 DMA.
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