Deepak Nitrite Q1 PAT rises three-fold to Rs303cr; Stock hits fresh 52-week high

Revenues at Rs1,534cr, up by 125% yoy. EBITDA at Rs460cr, higher by 144% yoy.

August 03, 2021 9:33 IST | India Infoline News Service
Quarterly Results
Deepak Nitrite Limited (‘DNL’), one of India’s leading chemical intermediates company, has announced its financial results on July 29, 2021 for the quarter ended June 30, 2021.

The company’s revenues improved by 125% yoy to Rs1,534cr in Q1FY22 from Rs681cr in Q1FY21, owing to recovery in standalone operations especially BC and FSC segments supported by sharply improved performance of DPL (Deepak Phenolics Limited, subsidiary company).

“DNL & DPL have actively catered to both domestic and export markets to drive higher volumes and capitalized on favourable realization even when some of the end-user industries are yet to return to pre-COVID levels of activity.

Commodity price inflation, resulting in higher input prices, has adversely impacted the FSC and PP segment but had a favorable effect in the BC segment and in DPL. Growth rates to be viewed in the backdrop of the lower base of last year due to nationwide lockdown and related restrictions,” the company said in a filing on Monday.

EBITDA was at Rs460cr in Q1FY22 higher by 144% yoy compared to Rs188cr in Q1FY21. The EBITDA margin improved by ~200 basis points to 30%.

Operating leverage from recovery in revenues combined with benefits from higher realization and cost management initiatives have aided the EBITDA performance, company said.

Profit After Tax (PAT) was at Rs303cr in Q1FY22, higher by 206%. Improved performance across segments including wholly owned subsidiary DPL has enabled the Company to report an increase in PAT even as the economy is yet to emerge from impact of the pandemic. EPS for Q1FY22 was Rs22.19 per share (of face value of Rs2 each) as compared to Rs7.25 per share in Q1FY21.

Ata round 9.36 am, Deepak Nitrite Ltd was trading at Rs2131.20 up Rs70.45 or 3.42% from its previous closing of Rs2,060.75 per piece on the BSE. The scrip opened at Rs2,082 and has touched a new 52-week high of Rs2,138.15 and low of Rs2,065.90 respectively.

“Deepak Nitrite has delivered a strong performance in a challenging quarter. In addition to the disruption caused by the second wave in India in April and May 2021, the operating environment was marked by rising input and energy costs, continued volatility in foreign exchange rates, constraints to in-bound and out-bound logistics as well as higher logistics and utility costs. The Company has leveraged its manufacturing excellence, world-scale integrated facilities and agile operations to deliver a consistent performance. This has been accompanied by further strengthening of its financial position and announcement of investments aligned to its growth strategy,” company said.

It further added, despite the restrictions, it ensured that all locations operated with the highest attention to man, material and process safety. Further, the Company has taken the responsibility of vaccinating all eligible employees and their spouses.

“In the face of a severe second wave, our teams have once again responded admirably, enabling us to sustain the momentum of performance from the latter half of FY21 into the first quarter. Our de-risked business model encompassing investment in the entire value-chain of building blocks to specialty chemicals has helped continue to improve the resilience in the short run, while opening out newer opportunities in the long run,” Deepak C. Mehta, Chairman & Managing Director, said.

“During the last two quarters, while the price push in commodities have increased the pressure on margin of FSC and PP businesses, the Company was able to recover much more through margins in the bulk chemical business including Phenol & Acetone. Last year the situation was reversed and yet the Company achieved a healthy EBITDA percentage. The pandemic COVID-19, besides affecting people at large, is also causing major disruption in supply chains world over. There are times when demands dip and there are times when demands jump significantly also causing violent fluctuations in prices as well as availability,” he added.

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