Deepak Nitrite has delivered a superlative performance in Q4 FY19
Mumbai/Vadodara, India: Ranked among Fortune Next 500 and recognized among the top 25 wealth creators by Fortune Magazine, India, Deepak Nitrite is acknowledged as one of the country's fastest growing chemical companies. 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. Its products are manufactured across five locations, which are all accredited by Responsible Care. Deepak Nitrite Limited has announced its financial results for the quarter and financial year ended 31st March, 2019.

Deepak Nitrite Ltd., with a focus on technology leadership and a diverse product portfolio underlining its premier position in the Chemical Intermediates industry, has delivered a stellar performance in Q4 FY19 with highest-ever turnover and profit in its 48 year history. Each of the three business divisions have contributed to this record growth in Topline and profitability, taking total turnover of the Company for FY19 to 2,715 crore.

Deepak Phenolics Ltd. (DPL), where operations began just 5 months ago has achieved a quick ramp-up of capacity utilisation to over 80 per cent . DPL has contributed to significant savings in forex for the Nation by establishing local manufacturing of Phenol and Acetone, which were hitherto imported in large numbers. DPL has closed the fiscal with positive EBITDA and Profit After Tax.

Commenting on the performance, Mr. Deepak C. Mehta, Chairman & Managing Director, said, "The Chemical Industry in India is witnessing an unprecedented growth opportunity largely due to International Events. For a Company like Deepak Nitrite, which is into chemical intermediates, the opportunity stands accentuated as its products support a wide range of industries. In the current scenario, Chemical Intermediates are witnessing a big jump in demand both due to domestic end user industries growing and reduced availability of intermediates from China. We expect the situation to remain conducive for the foreseeable future.

In this backdrop, DNL was able to ensure peak performance in spite of fluctuating availability and pricing of Raw Materials. As a result, fiscal year 2019 has been a defining year as the Company commissioned its mega- Greenfield facility of Phenol & Acetone, elevated the performance of all of its segments and more than doubled consolidated EBITDA and PAT.

I am happy to report that all of the divisions performed well and the DPL team has done an excellent job not only in ensuring peak plant performance but also in managing the logistics of over 300,000 tonnes of material and maintaining margins inspite of the fluctuating oil prices. On an overall basis, due to various initiatives, we expect to sustain the growth momentum across all segments in the ensuring quarters.

The Board has recommended a higher dividend of 2 per share in FY19 amounting to 100 percent of Face Value to share the benefits of the robust performance and sustain the value creation focus towards all stakeholders."

Financial Highlights (Standalone)

Q4 FY2019
  • Revenues were 487.8 crore in Q4 FY19 compared to 399.3 crore in Q4 FY18, higher by 22 percent Y-o-Y. The Q4 performance is testament to the strategic choices of products identified for capacity expansion at the start of the fiscal. Apt assessment of market demand enabled DNL to reap benefits from higher realisations across key products even as overall volume growth was 11 percent y-o-y.
  • EBITDA stood at 110.7 crore, higher by 100 per cent as against to 55.4 crore reported in the same period last year. EBITDA margins improved sharply by 880 basis points to 22.7 percent, as compared to 13.9 percent in Q4 FY18. The Company's efforts at running plants at optimum capacities with streamlined processes were more than supported by the developments in the China market, all of which has combined to contribute to the enriched margin profile.
  • PBT stood at 87.0 crore in Q4 FY19 increasing by a commendable 182 percent over 30.1 crore in the same period last year
  • Outstanding growth in PAT by 178 percent y-o-y to 56.6 crore in Q4 FY19 as compared to 20.3 crore in Q4 FY18.
  • EPS for Q4 FY19 stood at 4.15 per share (of face value of 2 each) on an enlarged capital base as compared to 1.51 per share in Q4 FY18.
Performance Highlights
Domestic & Exports
  • Domestic revenues stood at 344.5 crore in Q4 FY19 from 243.3 crore in the same period last year, delivering strong growth of 42 percent Y-o -Y. DNL's cost leadership and position as the only backward integrated plant in the world for OBA has enabled it to capitalize on evolving market opportunities for the Performance Products segment due to shutdown of capacities in China. This, along with expansion in key building blocks enabled us to cater to higher demand from end user industries resulting in robust topline growth.
  • Revenues from exports came in at 138.4 crore in Q4 FY19 compared to 147.3 crore in Q4 FY18. Export performance was flat due to extended production schedules and transit timelines for select products, the impact of which is transitionary in nature. Export revenues are expected to recover in the subsequent quarter.
Update on Deepak Phenolics Ltd.
Deepak Phenolics Ltd. (DPL), a wholly-owned subsidiary of Deepak Nitrite Ltd ., commenced commercial production at its Mega-Plant of Phenol & Acetone on 1st November, 2018. This facility, aligned with the 'Make in India' initiative of Government of lndia, has capacity to manufacture 200,000 MTPA of Phenol and 120,000 MTPA of its coproduct Acetone. This is supported by capacity to manufacture 260,000 MT of Cumene for captive consumption. DPL is well positioned to benefit from strong demand growth in the local market for these products.