Deepak Fertilisers And Petrochemicals Corporation Limited, one of India’s leading producers of industrial chemicals and fertilisers, announced its results for quarter ending December 31, 2021. Highlights of the report are:
Strong Topline growth across business segments; Operating Profit continued to build on growth momentum despite unfavourable raw material prices impacting Iso Propyl Alcohol and Fertiliser segment profitability
Chemical Segment contributed about 93% of total segment profit
Mining Chemical business delivered an outstanding quarter; Outlook remains encouraging supported by increase in Mining and Infrastructure related activities
Shift of global supply chain trend towards India driving strong demand of Nitric Acid from downstream customers
Launched unique crop-specific nutrition solution “Mahadhan Croptek” having essential primary, secondary and micronutrients required for crops
Finance Cost reduced by 15.4% Y-o-Y primarily driven by better working capital management and reduction in interest rate on existing loans
Adverse movement of key raw material prices in Q3 FY22 Y-o-Y (Ammonia▲ ~115%; Phos Acid ▲ ~78.5%; RGP ▲ ~76%)
Q3 FY22 Revenues increased by 49% to Rs. 1,182 Cr in Chemical segment comprising Mining Chemicals and Pharma / Speciality Chemicals. Segment Profit increased from Rs. 173 Cr in Q3FY21 to Rs. 319 Cr in Q3 FY22 (an increase of 84% Y-o-Y)
Mining Chemicals:
In Q3 FY22, TAN Business achieved a capacity utilization of 110%
Despite adverse impact of increasing Ammonia and Commodity costs, margins in all product segments (i.e., HDAN, AN Melt and LDAN) improved as supported by robust demand, sales volume growth (24% YoY & 31% QoQ) and improved product mix
Pharma / Speciality Chemicals:
Despite significant increase in Ammonia Prices, Nitric Acid demonstrated improvement in both volumes (6%) and margins backed by the improved demand from the downstream industries
Production at Dahej WNA Plant suffered due to technical issue which has been resolved and resumed normal operations in Dec 2021. Despite this, the overall revenue and margins were maintained
IPA demand remained subdued, significant increase in price of RGP (76%) impacted margins
Q3 FY22 Revenues grew by 19.1% to Rs. 769 Cr with segment profit of Rs. 28.5 Cr
Fertiliser segment profitability was impacted due to unfavourable movement of key RM Prices Y-o-Y (Ammonia▲ ~115%; Phos Acid ▲ ~78.5%)
Uncertainties of raw material availability impacted the NP and NPK volumes in Q3
For the first time in India, the Company, launched ‘Mahadhan Croptek’, a Crop Specific Nutrient which provide balance and Complete crop nutrient to crops
Shift of global supply chain trend towards India to continue to drive strong demand of Nitric Acid from downstream customers
Demand for explosives is expected to increase with the positive outlook for infrastructure, power and mining sectors
Strategically directed efforts right from crop specific product to farmer-focused marketing drive are expected to benefit DFPCL’s market share and margins
With almost full reservoir levels across the country, the stage is set for a good Rabi harvest
Greenfield ammonia plant is making speedy development on the ground and is progressing as per planned schedule
Commenting on the performance, Sailesh C Mehta, Chairman and Managing Director, said, “Our robust business performance reflects our deep strengths, emerging out of integrated operations and diversified end-user segments with continuous improvement in operating margin despite significant raw materials price increase.”