DEEPAK NITRITE
Q1 FY 18-19
INVESTOR PRESENTATION
Deepak Nitrite is Headquartered at Vadodara, Gujarat. It
is one of the leading
manufacturers of Basic Chemicals
(BC), Fine & Speciality Chemicals (FSC) & Performance Products (PP). It
has announced its financial results for the quarter ended June 30, 2018.Q1
FY2019
Revenue
:
Rs. 421.82 crore vs
Rs. 316.85 crore (excluding Fire and
loss of profit
insurance claim of
Rs. 22.5 crore) in
Q1 FY18, resulting in
robust growth of 33% yoy.
Basic Chemicals witnessed
improving demand and pricing
for key products,
Fine &
Speciality Chemicals
saw strong traction
especially in export markets.
Performance products has
delivered an encouraging performance on the back of
strategic initiatives implemented earlier.
EBITDA :
Rs. 56.89 crore,
vs to Rs. 34.17crore (excluding Rs.18.33 crore –Net of
Expenses, due to
insurance claim) –a growth of 66%
reported in Q1 FY18.
EBITDA margins :13.5% Vs 10.8% in Q1 FY 18 ,
improved 270 BPS
PBT : Rs.
33.36 crore in Q1 FY19, vs Rs. 12.38 crore
in Q1 FY 18, a growth of 170% in Q1 FY 18. Figures of Q1 FY18 are not fully
comparable as it had an impact of incident of fire at Doha.
PAT : Rs.
21.78 crore in Q1 FY19 Vs Rs. 8.10 crore in Q1 FY18, a growth of 169%
EPS :
Rs.1.60 for Q1 FY19 (on face value of Rs. 2 each) on an enlarged capital
base compared to Rs.
1.54 per share in Q1 FY18.
(QIP:
Issuance of 56,81,775
shares of Rs. 2
each at a price of Rs. 264 per share in January, 2018).
Mr.Deepak C. Mehta, CMD said,
“We have been able to (i) successfully pass on
rising input costs
to customers (ii)
have managed to
report higher volumes across export
and local markets (iii) focused
initiatives to turnaround
Performance Products segment have
also delivered.
our growth during the year will be driven by (i) increase
in capacities for select products, (ii) buildup of newly introduced product
lines and (iii) recognizing pockets of opportunity due to the shifts in the
global supply chain.
Domestic revenues stood at Rs. 265.05 crore in Q1FY19 vs
Rs. 214.95 crore in Q1 FY 18,
growing by 23% Y-o-Y.
Revenues from exports
came in at Rs.153.82 crore in Q1FY19 Vs Rs. 98.36 crore in Q1FY18,higher by 56%.
Segmental Performance
Revenues from the
BC segment stood at Rs.
222.62 crore in Q1FY19 Vs Rs. 180.44 crore in Q1FY18, growing by23%
Y-o-Y. Volume growth was 7%
Revenues from FSC segment were
Rs. 122.37 crore in Q1 FY19, higher by 49%compared to Rs.81.94 crore in Q1
FY18. solid volume growth of 25%
PP segment reported revenues of Rs. 80.51 crore in Q1
FY19 compared to Rs. 60.61 crore in Q1 FY18, a Growth of 33%y-o-y. Management
strategy to turn around the PP segment has delivered results.
UPDATE
ON PHENOL AND ACETONE PROJECT
DNL is implementing a mega
project, to manufacture 200,000 MTPA of Phenol and 120,000 MTPA of the
co-product Acetone. This is being supported by capacity to manufacture 260,000
MT of Cumene, which is a feedstock for manufacturing Phenol and Acetone.
This project is being implemented in a 100% subsidiary,
i.e. Deepak Phenolics Limited (DPL). The proposed Phenol Plant is located at
Dahej, with a capital expenditure of Rs. 1,400 crore being funded by debt and
equity in the ratio 60: 40.
DPL will address the opportunity in the domestic market
which is currently met by imports. Its plant is being based on cutting-edge
technology and will be resource and energy efficient. Local availability of
Phenol and Acetone is expected to boost the production of derivatives and downstream
intermediates, which will expand the overall market in the country.
Progress:
All pre-commissioning
activities have been concluded and the mega-greenfield project is on the verge
of commissioning. the plant is expected to be commissioned in the month of
August, 2018.
OUTLOOK
The roadmap for FY19
appears encouraging as we expect to deliver sustained growth across all the Strategic
business Units-Basic Chemicals, Fine & Speciality Chemicals and Performance
Products.
Growth will be led by
Basic Chemicals due to focus on further strengthening of product portfolio as well
as brown field capex to enhance capacities of major products. The FSC segment
will benefit from full capacity utilisation during the year after receiving the
regulatory consent for the backward integration facility at Roha.
As informed
earlier, in order to take advantage of growing demand, the company has further
invested Rs 60-70 crores for increasing capacity in existing products in BC,
FSC segments. These projects shall be commissioned by Q2 FY2019.
With the
additional capacity, we shall see much improved performance in second half of
FY2019 and thereafter. PP segment will benefit from the improved demand and
pricing trends in the local and export markets combined with better efficiency
and utilisation of the plant.
Lastly, the commissioning of the Phenol and
Acetone facility will be a significant event for the Company which will drive a
quantum leap in its revenues and profitability as well as enhance the growth
trajectory for the Company as it will pave the way to enter in various derivatives
business.
REVENUES
Particulars Q1
FY19 Q1 FY18 %
Revenue from Operations 421.02 314.78 33.8%
PBT 33.36
30.71 8.6%
PAT 21.78
20.10 8.4%
EPS(Rs.) 1.60
1.51 6.0%
Note: 1. Insurance claim for damages and loss of profit, included
in the numbers for Q1FY18
Debt/Equity Ratio 0.45
0.79
