Deepak Fertilisers hits record high after Q2 PAT soars to Rs 214 cr

Profit before tax (PBT) jumped 155.78% to Rs 298.67 crore in Q2 FY25 as compared with Rs 116.77 crore in Q2 FY24.

Operating EBITDA increased 73% YoY to Rs 494 crore in Q2 FY25. EBITDA margin stood at 18% in Q2 FY25 as against 12% in Q2 FY24.

In Mining Chemical, the company's premium product LDAN's sales volume soared by 16% YoY. Overall sales volume was down by 21% YoY in Q2 due to a planned shutdown and lean seasons due to monsoon.

The company expects the mining and infrastructure to pick up post monsoon as demand for power (coal), cement & steel is expected to increase thereby providing robust support for (Technical Ammonium Nitrate) TAN demand.

In Industrial Chemicals, nitric acid volumes was marginally down by 1% on YoY basis and up by 13% on QoQ basis.

Isopropyl Alcohol (IPA) volumes experienced a 10% YoY decline due to process constraints and a plant shutdown. However, the recent implementation of an anti-dumping duty (ADD) at $ 217 per metric ton for a period of five years is anticipated to enhance both demand and pricing moving forward.

On the outlook front, the company said that for nitric acid, the demand and margins are expected to be stable over the next few quarters. Propylene-based IPA demand and margins are expected to be stable and improve following the implementation of the ADD on Chinese suppliers over few quarters.

In Crop Nutrition business (Fertilisers), sales volume of manufactured bulk fertilizer market jumped 83% year on year to 268 KMT during the quarter, driven by improved demand from above-average rains, which led to 102% Kharif crop sowing and positive market sentiment across all regions.

Sales volume of Croptek surged to 37 KMT, reflecting a 70% YoY growth, with continued focus on providing crop-specific solutions for targeted crops, including cotton, soybean, sugarcane, corn, grapes, pomegranate, and banana. Sale of specialty fertilizer Bensulf was 9 KMT, up 7% YoY.

Net Debt to EBITDA ratio improved to 1.64x from 2.66x.

Sailesh C. Mehta, chairman & managing director, said, 'DFPCL has shown impressive performance in Q2 FY25, achieving a 13% growth in revenue. This growth was primarily driven by the Crop Nutrition business, which experienced an 18% YoY increase in revenue, while the Chemical business grew by 8% YoY despite a lean quarter for the chemical sectors. Fertilizer and Chemical businesses acted as a natural hedge, enabling the company to deliver consistent and improved performance

We are actively working on the execution of the TAN Project and the Nitric Acid Project in Gopalpur and Dahej, respectively, to capitalize on future growth.'

Meanwhile, the company's chief financial officer (CFO), Deepak Rastogi announced resignation. He will hold office of president & chief financial officer of the company till 30th November, 2024 and his last working day will be 14th January, 2025.

Further, the company's board approved the appointment of Subhash Anand who is currently president ' strategy as president and chief financial officer of the company in place of Deepak Rastogi with effect from 1st December, 2024.

Deepak Fertilisers and Petrochemicals Corporation is a manufacturer of fertilizers and chemicals.

The scrip hit an all-time high at Rs 1,335 in intraday today.