Deepak Nitrite Limited's PAT rises to 206% on a Y-o-Y basis
Editors Synopsis Q1 FY22 YoY consolidated Revenues at Rs. 1,534 crore, up by 125 PAT at Rs. 302.63 crore, up by 205.84 EBITDA at Rs. 460 crore, higher by 144 New investments for more complex downstream using Fluorination etc., through 300 crore investments at new site in Deepak Nitrite Deepak Phenolics to invest Rs. 700 crore, to add new solvents, which are downstream of Phenol Acetone MUMBAI and VADODARA, India, Aug. 3, 2021 PRNewswire -- Deepak Nitrite Limited DNL, a leading chemical intermediates company, has delivered a strong performance despite a challenging quarter.
• Revenues at Rs. 1,534 crore, up by 125% • PAT at Rs. 302.63 crore, up by 205.84% • EBITDA at Rs. 460 crore, higher by 144% • New investments for more complex downstream using Fluorination, etc., through 300 crore investments at a new site in Deepak Nitrite • Deepak Phenolics to invest Rs. 700 crore, to add new solvents, which are downstream of Phenol & Acetone MUMBAI and VADODARA, India, Aug. 3, 2021 /PRNewswire/ -- Deepak Nitrite Limited ('DNL'), a leading chemical intermediates company, has delivered a strong performance despite a challenging quarter. Profit After Tax has risen by 206% (YoY).
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 consistent performance. This has been accompanied by further strengthening of its financial position and announcement of investments aligned to its growth strategy.
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 spouses.
Financial Highlights (Consolidated) Q1 FY2022 vs. Q1 FY2021 (y-o-y) • Revenues improved by 125% to Rs. 1,534 crore in Q1 FY22, owing to a recovery in standalone operations especially BC and FSC segments supported by sharply improved performance of DPL. DNL & DPL have actively catered to both domestic and export markets to drive higher volumes and capitalized on favorable 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 on the BC segment and DPL. Growth rates are to be viewed in the backdrop of the lower base of last year due to nationwide lockdown and related restrictions.
• EBITDA was at Rs. 460 crore in Q1 FY22 higher by 144% on a Y-o-Y basis. 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 • PAT was at Rs. 303 crore in Q1 FY22, 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 the impact of the pandemic.
• EPS for Q1 FY22 was Rs. 22.19 per share (of the face value of Rs. 2 each) as compared to Rs. 7.25 per share in Q1 FY21.
Q1 FY2022 Vs. Q4 FY2021(q-o-q) • Revenues were higher by 4% at Rs. 1,534 crore in Q1 FY22 compared to Rs. 1,469 crore in Q4 FY21. The Company navigated through several challenges during the quarter in the form of severe second waves and disruption in export-import logistics. Within this backdrop, Deepak Nitrite has delivered a resilient performance. With a focus on higher productivity, the Company was able to maintain higher throughput despite disruptions as above.
• PBT was higher by 4% to Rs. 405 crore compared to the previous quarter.
• EPS for Q1 FY22 was Rs. 22.19 per share (of the face value of Rs. 2 each) as compared to Rs. 21.27 per share in Q4 FY21 CMD's Message Commenting on the performance, Mr. Deepak C. Mehta, Chairman & Managing Director, said, ''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's venturing into the value chain as well as nimble footedness to shift to changing market continues to give resilience and support to its sustainable performance.
New investments have been made to make more complex downstream using Fluorination etc., through 300 crore investments at the new site in Deepak Nitrite. At Deepak Phenolics, while the company is in an advanced stage of doubling the IPA plant and strengthening its utility capability, it is looking forward to investing another Rs.700 crore to add new solvents, which are downstream of Phenol & Acetone. These solvents which are required for Life Science Industry, such as Pharma & Agrochemicals, would also support growing demands in the coating segment. Deepak will continue to focus on expanding its basket of solvents.'' Performance Highlights Segmental Performance - Q1 FY22 Vs. Q1 FY21 (Y-o-Y) • Basic Chemicals: The BC segment reported revenues of Rs. 249 crore in Q1 FY22 as against Rs. 153 crore in Q1 FY21, higher by 63%. Performance during the quarter has been achieved despite the short-term impact witnessed in the MSME sector due to the resurgent second wave and challenges around logistics. The Company has capitalized on pricing opportunities to maintain performance even as some end-user industries continue to be impacted by the pandemic-led drop inactivity.
• Fine & Specialty Chemicals: The FSC segment revenues grew by 48% to Rs. 207 crore in Q1 FY22 compared to Rs. 140 crore in Q1 FY21. Disruption to export-import-bound logistics has impacted volumes this quarter. Further, profitability has been impacted by rising commodity prices.
• Performance Products: Revenues The PP segment revenues came in at Rs. 93 crore in Q1 FY22 vs. Rs. 61 crore in Q1 FY21, up 54%. While key end-user industries are yet to recover to pre-COVID levels, there has been an improvement in volumes in the PP segment. With DASDA prices also inching back to normalcy, the PP segment has delivered an improved performance this quarter.
Deepak Phenolics: Revenues grew by 202% to Rs. 999 crore in Q1 FY22 compared to Rs. 331 crore in Q1 FY21. The plant continues to be operated at high utilization with the quarterly average utilization at 110% despite constrained movement of manpower and materials during the peak of the second wave. This has allowed the Company to capitalize on favorable demand trends and attractive pricing for both Phenol and Acetone. While EBITDA soared by 263% Y-o-Y from Rs. 86Cr in Q1 FY21 to Rs. 313Cr in Q1 FY22, the EBITDA margin stood at 31% in Q1 FY22 as compared to 26% in Q1 FY21.
Key Developments • Deepak Nitrite Limited has been felicitated by Dun & Bradstreet as a winner under the Best Growth Performance - Chemicals • Fortune India has ranked Deepak Nitrite at No. 2 in the list of India's Top 100 Wealth Creators.
• Land development in Dahej-2 is nearing completion on a 55-acre site, out of a total of 127 acres • The Company added plans to invest 700 crores downstream of Phenol & Acetone to make new import substitute solvents. Earlier on it had already announced investments to add new chemistries like fluorination to expanding specialty product lines with an investment of over 300 crores. About Deepak Nitrite Limited Ranked among Fortune India, Next 500, and Forbes Asia (under Bn) top 200, DNL is one of the fastest-growing chemical intermediates with a diversified portfolio that caters to the dyes and pigments, agrochemical, pharmaceutical, plastics, textiles, paper, and home and personal care segments and petro-derivates intermediates -phenolics, acetone and IPA in India and overseas. Its products are manufactured across 6 locations, which are all accredited by Responsible Care.
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