Early green shoots witnessed after some turbulence: Deepak Fertilisers

Deepak Fertilisers and Petrochemicals Corporation Ltd. (DFPCL), a leading producer of industrial chemicals and fertilisers, has reported total revenues of Rs. 1,122-crore and EBITDA of Rs. 120-crore in Q1 FY2020.

According to a company press release, margins improved from 6.8% (Q4 FY2019), to 6.7% (Q1 FY2019) and to 10.7% (Q1 FY2020). PAT stood at Rs. 10.7-crore in Q1 FY2020 – an improvement by104% compared to Q4 FY2019.

During Q1FY20, DFPCL commenced commercial production of Nitric Acid at Dahej, Gujarat; and entered into long term agreements for about 70% of the capacity in April 2019.

According to Mr. Sailesh Mehta, Chairman & Managing Director, DFPCL, the Technical Ammonium Nitrate (TAN) business, which is directly linked with infrastructure and mining activities, continues to experience growth momentum. Acids business performance improved during the quarter primarily on the back of higher demand and commencement of operations of the new nitric acid plant. The plant at Dahej, Gujarat has already established highest single day production of 98% for weak nitric acid (WNA) and 90% for concentrated nitric acid (CNA) and is expected to operate at optimal capacity steadily very soon.

The isopropyl alcohol (IPA) business was, however, impacted by cheaper Chinese imports and lower volumes due to temporary plant shut down on account of non-availability of propylene, caused due to maintenance shut down at propylene supplier Bharat Petroleum Corporation Ltd. (BPCL).