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Deepak Fertilisers soars 17% on heavy volumes; Q3 net jumps 4-fold

With the government's ongoing focus on investment-led growth and strong structural drivers, the management remains confident about the future of the chemical and fertilizer industries.

agriculture

agriculture

SI Reporter Mumbai

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Shares of Deepak Fertilisers and Petrochemicals Corporation soared 17 per cent to Rs 1,314 on the BSE in Wednesday’s intra-day trade amid heavy volumes after the company reported 318 per cent year-on-year (YoY) jump in consolidated net profit at Rs 253 crore in the December quarter (Q3FY25), backed by healthy operational performance. The company is one of the leading producers of industrial & mining chemicals and fertilizers and had posted a net profit of Rs 61 crore in Q3FY24.
 
Consolidated revenue saw a strong 39 per cent YoY growth, reaching Rs 2,579 crore for the quarter. The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) increased 72 per cent YoY to Rs 486 crore with a margins improvement from 15 per cent to 19 per cent.
 
 
At 03:15 PM; Deepak Fertilisers was trading 16 per cent higher at Rs 1,298, as compared to 0.8 per cent rise in the BSE Sensex. The average trading volumes at the counter jumped over nine-fold with a combined 6.5 million equity shares changing hands on the NSE and BSE. The stock had hit a 52-week high of Rs 1,443.35 on December 9, 2024.
 
India faced a slightly slower start to the year, but with the government’s ongoing focus on investment-led growth and strong structural drivers, the management remains confident about the future of the chemical and fertilizer industries.
 
The demand drivers remain robust, with clear undercurrents emerging from India’s increasing needs for coal for power generation, limestone for cement, and infrastructure development - all of which provide strong tailwinds for the company’s Mining Chemicals business.
 
Likewise, the rising income levels and shifting food consumption towards more fruits and vegetables, is perfectly aligning with the growth of the company’s Crop Nutrition business. Additionally, the China Plus One strategy and the growing demand for specialty chemicals are driving growth in Industrial Chemicals business, the management said.
 
The company said the growth momentum of mining chemicals is expected to strengthen in Q4FY25, which traditionally marks the peak production period for Mining and Infrastructure activities. This surge is anticipated to drive higher demand for explosives in these sectors, positively impacting the demand for all Technical Ammonium Nitrate (TAN) products.
 
The demand and margins for Nitric Acid are expected to remain stable. However, the management is experiencing a short-term disruption caused by the influx of cheap Chinese Nitroaromatics, which has affected downstream acid customers. On a positive note, propylene-based IPA margins are projected to gradually increase, driven by the AntiDumping Duty (ADD) on IPA and the narrowing Phenol-Benzene spread, the company said.
   

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First Published: Jan 29 2025 | 3:33 PM IST

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