Deepak Fertilisers and Petrochemicals Corporation Ltd. on Tuesday announced its financial results for the quarter ended December 31 with the profit before tax increasing substantially from Rs. 32.29 crore in Q3 FY16 to Rs. 75.68 crore in Q3 FY17, an increase of 134 percent.
In a statement released by the company, it said that the profit after tax (PAT) also increased significantly from Rs. 22.74 crore in Q3 FY 16 to Rs. 46.62 crore in Q3 FY 17, an increase of 105 percent.
Conducive market conditions, competitive raw material prices and reasonably good market realization contributed towards a better performance by the Chemical segment. Trading business in this segment displayed a steep jump and registered revenue increase of 77 percent as compared to same quarter previous year.
Volumes of Technical Ammonium Nitrate (TAN) were impacted due to balance inventory of cheap imports, though overall the segment witnessed an improvement in the margins due to efficiency of operations and competitive raw material prices.
Chemical segment revenues stood at Rs. 883.18 crore in Q3 FY17 as against Rs. 778.10 crore in Q3 FY16, whereas profit for the chemicals segment stood at Rs. 161.20 crore in Q3 FY17 as against Rs. 93.56 crore in Q3 FY16. Acids, IPA and other traded products achieved better margins, while lower sales volume of TAN impacted the segment performance.
The overhang of discounts on the channel inventory, present prevailing uncertainty in the agri sector and low purchasing power of the farmers due to demonetization during the rabi sowing period, impacted the performance of the segment during the quarter.
Furthermore, considering the huge inventories available in the channel, the company restricted volumes of the trading business. Thus, overall performance of the fertilizer segment was subdued during the quarter. Total income of the fertilizer segment dropped from Rs 409.65 crore in Q3 FY 16 to Rs 229.50 crore in Q3 FY 17, fertilizer segment reported a loss of Rs. 5.95 crore in Q3 FY 17 as against Rs. 1.26 crore in Q3 FY 16.
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The new NPK plant is ready for commercial production after successful trials and is geared up to provide high quality fertilizers to the farmers during the upcoming kharif season.
"It is a great moment of pride for us as we celebrate the 25th year of our Mahadhan brand with the commissioning of our expanded NPK capacities. Trials have been successful and we are geared up to launch the commercial production of the new grades soon," said chairman and MD DFPCL, Sailesh C. Mehta.
"Industrial chemicals continue to perform well and we are hopeful of economic outlook supporting business plans of growth in all our business segments," added Mehta.