Deepak Nitrite rallies 10% on heavy volumes, inches toward record high

Last week, Deepak Phenolics, a wholly-owned subsidiary of the company, commenced commercial production of Isopropyl Alcohol at its manufacturing facility situated at Dahej, Gujarat.

Shares of Deepak Nitrite rallied 10 per cent to Rs 534 on the BSE on Wednesday on the back of heavy volumes. The stock of commodity chemicals manufacturer was trading close to its all-time high of Rs 543 touched on March 4, 2020.

The trading volumes on the counter more than doubled with a combined 2.32 million equity shares, representing 1.7 per cent of total equity of Deepak Nitrite, changing hands on the NSE and BSE till 01:14 pm.

In the past one week, the stock has surged 17 per cent after Deepak Phenolics, a wholly-owned subsidiary of the company, commenced commercial production of Isopropyl Alcohol (‘IPA’) at its manufacturing facility situated at Dahej, Gujarat effective April 21, 2020.

This facility has the manufacturing capacity of 30,000 MT of IPA annually. IPA product is a solvent and majorly used by pharma companies and is also used for manufacturing sanitizer.

In the past one month, the stock has soared 46 per cent against 10 per cent gain in the benchmark index.

Earlier this month, from April 6, 2020, the company had commenced the production of 2 Ethyl Hexyl Nitrate (2EHN) at its Nandesari facility in Gujarat. 2EHN finds application and is one of the essential raw materials / additives used in refining process of diesel oil produced by various refineries.

For the quarter ended December 2019 (Q3FY20), Deepak Nitrite had reported four-fold jump in standalone profit before tax (PBT) at Rs 191 crore, on the back of strong operational performance.  The company’s total revenue from operations rose 28 per cent at Rs 587 crore on year-on-year (YoY) basis.

Deepak Phenolics had registered revenue growth of 24 per cent YoY to Rs 550 crore in Q3FY20, with EBITDA of Rs 58 crore and delivered its maiden profitable quarter with profit after tax of Rs 15 crore for the quarter.