Falling crude oil prices pulls down Deepak Nitrite's revenues

The falling crude oil prices has resulted in bringing down the revenues of Deepak Nitrite during the third quarter of 2014-15. The Vadodara-based chemical manufacturer posted revenues of Rs 306.34 crore in the quarter ended on December 31, 2014, down by nine per cent compared to Rs 338.44 crore in the third quarter of 2013-14.
 
Deepak Nitrite has, however, registered a 12 per cent rise in net profit at Rs 12.73 crore for the third quarter of the current financial year compared to Rs 11.35 crore in Q3 2013-14.
 
The company attributed the impact on growth in revenues to fall in price of crude and related products and its fallout on customers across the value chain.
 
Commenting on the results, Deepak Mehta, vice-chairman and managing director, DNL, said, “The sharp fall in the international prices of crude oil has resulted in significant uncertainty across the entire chain. This has compressed demand for our products from our customers as they are currently re-evaluating strategies to minimise the operational impact of this development. As a result, the performance in Q3 of this fiscal has been subdued and would have moderated even further had it not been for the steadily increasing volumes in the fluorescent whitening agents (FWA) segment.”
 
He added, “Notwithstanding a soft performance in Q3, we are pleased to report continued momentum in operations for the first nine months of fiscal 2015. Growth in revenues on a y-on-y basis has come from our bulk chemicals and commodities (BCC) and FWA segments which witnessed healthy demand in both domestic and export markets.”
 
According to Mehta, the Dahej facility has reported a pickup in volumes in both domestic and export markets resulting in encouraging growth on a y-on-y basis. “On an overall basis, the outlook for the business is good and we are confident that recent volatility in volumes from some customers will stabilise going forward. This will be supported by the growth outlook for our Dahej facility and our upcoming phenol project,” he said.
 
The company plans to raise an amount up to Rs 200 crore by way of Qualified Institutional Placement (QIP) of equity shares.
 
Deepak Nitrite manufactures BCC, fine and speciality chemicals (FSC) and FWA and has manufacturing facilities at Nandesari in Vadodara and Dahej in Bharuch in Gujarat, Roha and Taloja in Maharashtra, and at Hyderabad in Andhra Pradesh.