Deepak Nitrite Delivers Standout Growth in Q1 FY19

VADODARA, India, August 6, 2018 /PRNewswire/ --

- Revenue at Rs. 422 crore Vs. Rs. 317 crore in Q1 FY18, up by 33% 

- EBITDA at Rs. 57 crore Vs. Rs. 34 crore in Q1 FY18, growth of 66% 

- PAT at Rs. 22 crore Vs. Rs. 8 crore in Q1 FY18, higher by 169% 

- On the verge of commissioning its Greenfield Phenol & Acetone Plant 

Deepak Nitrite Limited (BSE: 506401) (NSE: DEEPAKNTR) (ISIN ID: INE288B01029), one of the leading manufacturers of chemical intermediates, having a wide product portfolio of Basic Chemicals (BC), Fine & Speciality Chemicals (FSC) & Performance Products (PP), has announced its financial results for the quarter ended June 30, 2018.

Commenting on the performance, Mr. Deepak C. Mehta, Chairman & Managing Director, said, "I am pleased to share that we have begun Financial Year 2019 on an exuberant note with strong double-digit growth in revenues, EBITDA and Profit After Tax. We have been able to successfully pass on rising input costs to customers and have managed to report higher volumes across export and local markets amidst rising oil prices. The focused initiatives to turnaround the Performance Products segment have also delivered and the effect of full integration of value chain (Toluene>PNT>DASDA>OBA) is now visible.

FY2019 is set to be a breakthrough year for us as we commission our ambitious mega-Greenfield project of Phenol and Acetone in Dahej in the current month. This will enable a quantum leap in revenues and profits for the Company in the initial stage and subsequently open up new verticals of growth towards value-added import substitutes. At full capacity, we anticipate that our plant will save the nation close to USD$ 400 million in value of imports saved.

In addition to this, our growth during the year will be driven by increase in capacities for select products, build up of newly introduced product lines and recognising pockets of opportunity due to the shifts in the global supply chain. We are already witnessing escalation in enquiries for existing and new products and are geared up to capitalise on the multiple opportunities ahead." 

Financial Highlights 

Q1 FY2019

• Revenue (Net of Excise Duty) stood at Rs. 421.82 crore as compared to Rs. 316.85 crore (excluding Fire and loss of profit insurance claim of Rs. 22.5 crore) reported in Q1 FY18, resulting in robust growth of 33% yoy. All of the Strategic Business Units (SBUs) contributed positively to the topline performance. While Basic Chemicals witnessed improving demand and pricing for key products, Fine & Speciality Chemicals saw strong traction especially in export markets. The Performance products segment has also delivered an encouraging performance on the back of strategic initiatives implemented earlier.
• EBITDA came in at Rs. 56.89 crore, higher by 66% as against to Rs. 34.17 crore (excluding Rs. 18.33 crore - Net of Expenses, due to insurance claim) reported in Q1 FY18. EBITDA margins improved by 270 basis points to 13.5%, as compared to 10.8% in Q1 FY18. Combination of higher contribution from all business segments, benefits of operating leverage and better product acceptance enabled the increase in EBITDA.
• PBT stood at Rs. 33.36 crore in Q1 FY19, a growth of 170% over Rs. 12.38 crore in the same period last year.

However, the figures of Q1 FY18 may not be fully comparable as it had an impact of incident of fire at Roha.

• PAT grew by 169% to Rs. 21.78 crore in Q1 FY19 as compared to Rs. 8.10 crore in Q1 FY18. Q1FY19 has been an excellent quarter wherein the Company has withstood challenging operating conditions to drive buoyancy in product volumes, witnessed initial success from strategic initiatives implemented and derived benefits from better pricing and cost management all of which have combined to significantly enhance profitability.
• EPS for Q1 FY19 stood at Rs. 1.60 per share (of face value of Rs. 2 each) on an enlarged capital base compared to Rs. 1.54 per share in Q1 FY18. (QIP: Issuance of 56,81,775 shares of Rs. 2 each at a price of Rs. 264 per share in January, 2018).

Performance Highlights 

Domestic & Exports

• Domestic revenues stood at Rs. 265.05 crore in Q1 FY19 from Rs. 214.95 crore in the same period last year, growing by 23% Y-o-Y. Environmental challenges and production disruptions in China led to volume gains for local customers boosting domestic revenues.
• Revenues from exports came in at Rs. 153.82 crore in Q1 FY19 compared to Rs. 98.36 crore in Q1 FY18, higher by 56%. Export performance was driven by strong demand trends in key markets across all segments, currency tailwind and stabilisation of operations compared to the same quarter in the previous financial year.

Update on Phenol & Acetone Project 

Progress:

All pre-commissioning activities have been concluded and the mega-greenfield project is on the verge of commissioning. The Leadership team and functional teams have been appointed and the marketing team has already commenced customer outreach program. The Construction work began in the month of May, 2016 and in a record time of approx. 24 months construction work has been completed. Currently we are doing trial runs at the plant and even amidst the transporters' strike, the plant is expected to be commissioned in the month of August, 2018.

On the Market front, when the project was announced, demand for Phenol in India was around 275,000 MT which has seen 8.5% growth and current demand is around 350,000 MT. Demand is expected to grow at around 10-12% p.a. Owing to the strong latent demand for phenol combined with reliability associated with local production, the Company has received highly encouraging response to its seed marketing programme.

Phenol demand is also growing globally, due to which, the demand-supply capacity is moving towards equilibrium, as downstream projects in China which commenced earlier during the current calendar year have led to greater captive consumption of Chinese Phenol capacity. Developments in the Chinese market have been accompanied with shutdown of a large global facility for production of Phenol in the US. These factors have resulted in firming up of overall prices of Phenol globally.

About Deepak Nitrite Limited 

Deepak Nitrite Limited (NSE: DEEPAKNTR) (BSE: 506401) Headquartered at Vadodara, Gujarat, DNL is a multi-division and multi-product, chemical intermediate with manufacturing facilities at Nandesari & Dahej in Gujarat, Roha and Taloja in Maharashtra, and at Hyderabad; having product portfolio of Basic Chemicals (BC), Fine & Speciality Chemicals (FSC) & Performance Products (PP). Further, it is at final stages of commissioning of Phenol and Acetone production through its wholly owned subsidiary Deepak Phenolics. As a partner of choice for Domestic and Global Chemical majors, DNL is emerging as one of the fastest growing Company, adhering to Responsible Care.

Please visit http: http://www.deepaknitrite.com for more information on the company.

Safe Harbour

Some of the statements in this document that are not historical facts are forward-looking statements. These forward-looking statements include our financial and growth projections as well as statements concerning our plans, strategies, intentions and beliefs concerning our business and the markets in which we operate. These statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements. These risks include, but are not limited to, the level of market demand for our services, the highly-competitive market for the types of services that we offer, market conditions that could cause our customers to reduce their spending for our services, our ability to create, acquire and build new businesses and to grow our established businesses, our ability to attract and retain qualified personnel, currency fluctuations and market conditions in India and elsewhere around the world, and other risks not specifically mentioned herein but those that are common to industry. 

Media Contact :
Jaydip Chowdhury
[email protected]
+91-7573949521
Head - Corporate Affairs & Communication
Deepak Nitrite Ltd.