Commodity Chemicals company Deepak Fertilisers & Petrochemicals Corporation announced Q2FY25 results EBITDA Margin Growth: Improved to 18% compared to 12% YoY. Record Sales Volume in Bulk Fertilizer: Achieved an 83% YoY increase in sales volume of manufactured bulk fertilizer, marking the highest sales in a quarter. Anti-Dumping Duty Implementation: USD 217 per metric ton Anti-Dumping Duty (ADD) on IPA for a period of 5 years. In-House Capture of Ammonia Price Hikes: Increases in global ammonia prices are now fully captured internally. Capacity enhancement of approximately 10% resulting from debottlenecking of the TAN plants, delivering an additional 50 KTPA and bringing the total TAN capacity volumes to 587 KTPA to support the growing needs of India’s Mining sector. Debt Reduction: Prepaid Rs 200 crores in debt, improving the Net Debt to EBITDA ratio from 2.66x to 1.64x. Change in key RM Prices in Q2FY25: Ammonia up by ~11% YoY; MOP down by ~40% YoY; Gas up by ~9% YoY. Sailesh C. Mehta, Chairman & Managing Director, said: DFPCL has shown impressive performance in Q2FY25, achieving a 13% growth in revenue. This growth was primarily driven by the Crop Nutrition business, which experienced an 18% YoY increase in revenue, while the Chemical business grew by 8% YoY despite a lean quarter for the chemical sectors. Fertilizer and Chemical businesses acted as a natural hedge, enabling the company to deliver consistent and improved performance. There has been a consistent increase in the proportion of revenue from specialty products, along with an overall rise in revenue, driven by the strategic move of transitioning from commodity to specialty. Crop Nutrition Business (CNB) achieved a remarkable 83% YoY increase in sales volume of manufactured bulk fertilizer, which is highest ever sales. Mining Chemical: Monsoon is a lean period due to slowdown in mining activities. Accordingly, we had taken a planned shutdown of Technical Ammonium Nitrate (TAN) plant for maintenance and capacity enhancement of 50 KTPA, taking total capacity to 587 KTPA. The Industrial Chemicals business experienced a healthy revenue growth of 9%, despite marginal decrease in volumes. This performance underscores our strategic shift from commodities to specialty chemicals, which has effectively mitigated price volatility. The ammonia plant has enabled all our businesses to reap substantial benefits from backward integration, effectively mitigating supply chain risks and price volatility. As a result, we are now able to capture the increases in global ammonia prices within the group. As India continues to grow, the chemical and fertilizer sectors are poised to thrive. The demand outlook for the Crop Nutrition, Mining Chemicals, and Industrial Chemicals Business is well aligned with India’s growth story, providing strong and positive tailwinds. We are actively working on the execution of the TAN Project and the Nitric Acid Project in Gopalpur and Dahej, respectively, to capitalize on future growth. Result PDF
Conference Call with Deepak Fertilisers & Petrochemicals Management and Analysts on Q1FY25 Performance and Outlook. Listen to the full earnings transcript.
Commodity Chemicals company Deepak Fertilisers & Petrochemicals Corporation announced Q1FY25 results: Revenue delivered was Rs 2,281 crore, marginal decline by 1.4% on YoY basis due to lower commodity prices. EBITDA margin improved to 20.4% against 12.1% on YoY basis. PAT was Rs 200 crore which is 76% higher on YoY basis. Segment Performance: Chemical Segment (Mining and Industrial Chemical) contributed about 57% of total revenue which grew by 5% YoY mainly driven by improved demand in TAN business. Fertilisers Segment contributed 43% of total revenue which was lower by 9% YoY because of delay in monsoon which post July has picked up very well. Commenting on the performance, Sailesh C. Mehta, Chairman & Managing Director: DFPCL has delivered an impressive performance for Q1FY25, with notable increase in EBITDA margin by 823 bps YoY, up from 12.1% to 20.4%. The businesses are reaping the benefits of backward integration of Ammonia plant which has helped mitigate supply chain risk as well as price volatility and the benefits are captured within the group. Also, the strategy of moving from commodity to speciality has been working to sustain and enhance the margins of the businesses. Hon'ble National Company Law Tribunal (NCLT), Mumbai, has approved demerger plan for the Mining Chemicals and Crop Nutrition businesses. This strategic restructuring is a step towards achieving our vision of transitioning from Commodity to Specialty and moving from Customer to Consumer by providing holistic solutions, driven by specific business strategy, market leadership, technology and operational focus. Further, as indicated by the national budget and the government’s continued focus on critical sectors such as agriculture, power, mining, and infrastructure, which is promising for the company from both short-term and long-term perspectives. We continue to maintain sharp focus on operational efficiences, drive cost optimizations, capacity utilization, and productivity improvements, which will help us navigate through market challenges and remain steadfast in adding value to our shareholders. Result PDF