Company registered Profit After Tax (PAT)of Rs 200 crore which is 76 per cent higher on YoY basis.
Deepak Fertilisers and Petrochemicals Corporation Limited, one of India’s leading producers of industrial & mining chemicals and fertiliser announced its results for the first quarter ended June 30, 2024.
In Q1FY25 company delivered revenue Rs.2,281 Crores, marginal decline by 1.4 per cent on YoY basis due to lower commodity prices. Company’s EBITDA margin improved to 20.4 per cent against 12.1 per cent on YoY basis. Company’s PAT was Rs.200 crore which is 76 per cent higher on YoY basis.
During the quarter, sales of manufactured bulk fertilisers was 174 KMT, representing an 11 per cent increase YoY. The company has launched Smartek fertilizer for paddy, pulses, and cotton, along with the Croptek grade for soybean crops. Sales of specialty fertilizer product, Bensulf, amounted to 10 KMT this quarter, reflecting a 51 per cent increase YoY.
Sales of traded specialty fertilisers in Q1FY25 saw an 80 per cent increase YoY. With global prices for water-soluble fertilisers stabilizing, demand has now returned to normal levels.
With better monsoon, the demand outlook is positive. We are focusing on delivering crop specific and water-soluble fertilizers which deliver higher yield and productivity to the farmer. Additionally, our recent partnership with Israel-based Haifa Group will help to promote high-performance specialty fertilisers.
Segment Performance:
Chemical Segment (Mining and Industrial Chemical) contributed about 57 per cent of total revenue which grew by 5per cent YoY mainly driven by improved demand in TAN business.
Fertilisers Segment contributed 43 per cent of total revenue which was lower by 9 per cent YoY because of delay in monsoon which post July has picked up very well.
Reduction in key RM Prices during Q1FY25 has resulted in lower NSP: Ammonia 36 per cent YoY; MOP 37 per cent YoY; Gas 7 per cent YoY; while delivering improved overall margins.
Launched Croptek grade for Soyabean Crop and Smartek grade for Paddy-& Pulse.
The National Budget has proposed Duty hikes on Ammonium Nitrate and Duty reductions on the Precious Metals used for Catalysts, both will have a positive impact.
Commenting on the performance, Sailesh C. Mehta, Chairman & Managing Director said, “DFPCL has delivered an impressive performance for Q1FY25, with notable increase in EBITDA margin by 823 bps YoY, up from 12.1 per cent to 20.4 per cent.
The businesses are reaping the benefits of backward integration of Ammonia plant which has helped mitigate supply chain risk as well as price volatility and the benefits are captured within the group.
Also, the strategy of moving from commodity to speciality has been working to sustain and enhance the margins of the businesses.
Mining chemical segment demonstrated robust volume and margin growth supported by stable imported Fertliser Grade Ammoniam Nitrate (FGAN) prices and lower ammonia prices. The proposed duty hike on ammonium nitrate will also help going forward.
The fertilizer business volume was driven by Croptek and specialty fertilizers, providing crop-specific solutions to farmers. Despite delayed monsoon and high inventory of phosphatic fertilizers, volumes slightly declined by 3 per cent YoY. With rains predicted to be above normal, we expect volume growth in the coming quarter, boosted by new launches: Croptek grade for Soyabean and Smartek for paddy and pulses.
Margins of Nitric acid is stable with volumes lower on YoY basis due to extended repair in WNA plant. The IPA business declined by 8 per cent YoY due to the planned shutdown of the plant. Going forward, we expect stable demand in both Nitric Acid and IPA segment.
We continue to maintain sharp focus on operational efficiencies, drive cost optimizations, capacity utilization, and productivity improvements, which will help us navigate through market challenges and remain steadfast in adding value to our shareholders.
