Deepak Nitrite recorded a 13.2% rise in consolidated net profit to Rs 170.19 crore in Q2 September 2020 from Rs 150.41 crore posted in Q2 September 2019.
The chemical maker's consolidated net sales in Q2 September 2020 stood at Rs 987.34 crore, falling 1.6% from Rs 1003.33 crore posted in the same period last year. The result was announced after market hours on Friday, 30 October 2020.Profit before tax (PBT) came at Rs 228.84 crore in Q2 September 2020, 18.3% increase over Rs 193.43 crore in Q2 September 2019. Total tax expense rose by 36% to Rs 58.65 crore in Q2 September 2020 over Q2 September 2019.
Consolidated EBITDA rose 8.1% to Rs 280 crore in Q2 September 2020 over Q2 September 2019, led by a robust performance from the phenolics business.
The Phenolics division witnessed revenues increase by 26% y-o-y with EBITDA growth of 229%. New products such as IPA contributed to an increase in the EBITDA Margin which at 25.6%in Q2FY21 was sharply higher from 9.6% in Q2FY20. With manifold increase in exports, the company was able to maintain high capacity utilization. The business would continue to put effort in this direction. Despite consistent challenges in interstate logistics for raw materials and finished goods, the team demonstrated admirable agility in ensuring material movement. These challenges are not expected to show up in coming quarters.
Despite higher imports, Deepak Nitrite delivered sustainable production in excess of 100% of capacity and identified key export markets in lieu of domestic demand.
The company's domestic revenues stood at Rs. 672 crore in Q2 FY21 as against Rs 767 crore in the corresponding period last year. Export revenues were Rs 319 crore in Q2 FY21 compared to Rs 245 crore in Q2 FY20, higher 30% Y-o-Y. The focus was on regions that were on the path to recovery from the effects of the virus while deploying a strategy to take advantage of a depreciated currency to increase export bias.
Commenting on the performance, Deepak C. Mehta, managing director said, "Inspite of several challenges, the company could achieve stellar performance on a consolidated basis. This has been made possible due to significant hard work put in by the team to ensure highest capacity utilization where possible through planning to mitigate supply chain challenges. The team resorted to aggressive export positioning to ensure maximum plant utilization. Challenges due to the epidemic have certainly tested our business model and our large range of products covering varied business segments have ensured that the company could take on challenges in one segment by exhibiting better performance in the other segments. DNL's performance and attractiveness is highly influenced by its breadth and depth of products and process competency. This resilience has been instrumental in delivering dependable returns regardless of the myriad challenges that were faced through the quarter. While in the near term, investments that increase our competitiveness will start bearing fruit, the company continues to broaden its range of products as well as invest into value addition. I remain cautiously optimistic that DNL will continue to deliver sustainable value to all its internal and external stakeholders."
Shares of Deepak Nitrite were down 1.42% at Rs 731 on BSE.
Deepak Nitrite is one of the leading supplier of chemical intermediates. It has a diversified portfolio of intermediates that cater to the dyes and pigments, agrochemical, pharmaceutical, plastics, textiles, paper and home and personal care segments in India and overseas.
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