Tag: Deepak Nitrite

Deepak Nitrite shares surge to a two-year high after a ‘double upgrade’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of specialty chemicals company Deepak Nitrite Ltd. surged to the highest level since January 2022 after brokerage firm Morgan Stanley double-upgraded the stock to “overweight” from its earlier rating of “underweight.”

Morgan Stanley has also upgraded its price target on Deepak Nitrite to ₹2,985 from ₹1,625 earlier. The revised price target implies a potential upside of 22% from Friday’s closing levels. The price target has been raised to reflect a higher multiple for the base business and a higher medium-term capex.

The brokerage wrote in its note that Deepak Nitrite’s new and largest investment cycle so far could drive the next leg of re-rating for the stock. Along with this capex cycle comes the bottoming of its base business, operational and volume enhancements and a strong balance sheet.

Deepak Nitrite is set to double its base earnings by 2028, according to Morgan Stanley backed by the company’s push to become an integrated, downstream phenolics producer.

“We think the stars are aligned for Deepak Nitrite to recreate its previous success when it captured nearly 50% in India’s phenol market, leveraged a margin upcycle and saw consensus estimates rise by nearly 60% between financial year 2020 – 2022,” according to Morgan Stanley.

Deepak Nitrite’s multi-year pipeline of nearly $1 billion in investments is already under way. After the commencement of the company’s greenfield phenol capacity, Deepak Nitrite’s multiples have steadily expanded and have sustained at nearly double of its global chemical peers since 2021, which, as per Morgan Stanley, is a key surprise.

The brokerage sees further room for outperformance for Deepak Nitrite due to its industry-leading operating metrics and top-quartile returns and as new investments fructify and reflect in the company’s earnings.

Project slippages, slow execution and sluggish earnings are some of the key risks to Morgan Stanley’s estimates.

65% of the 20 analysts that have coverage on Deepak Nitrite have a “buy” rating on the stock, while four have a “sell” rating. The other three have a “hold” recommendation.

Shares of Deepak Nitrite are trading 6.5% higher at the start of trade on Monday to ₹2,618.85. With today’s surge, the stock has turned positive for the year, while it has risen 33% in the last 12 months.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Deepak Nitrite receives Rs 127 crore insurance settlement for Nandesari plant fire damage

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Deepak Nitrite Ltd on Wednesday, April 24, announced the receipt of the final insurance settlement totalling ₹127 crore in relation to the fire incident that occurred at the company’s Nandesari Plant on June 2, 2022.

“With reference to our earlier intimations relating to fire incident occurred at the Company’s Nandesari Ptant on 2nd June, 2022… we would like to inform you that with regard to the damage caused to certain properties, plant, equipment and inventory of the Company as well as the loss of profit due to business interruption, the Company has received ₹127 Crores towards the final settlement of Insurance claim from the Insurance Companies,” the company informed in an exchange filing.

Deepak Nitrite shares settled 0.84% higher on the BSE, quoting at Rs 2,389.70. It had reported a 3.4% year-on-year (YoY) decline in net profit at ₹202.1 crore for the third quarter that ended December 31, 2023. The company’s revenue from operations increased 0.9% to ₹2,009.2 crore in Q3FY24.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Deepak Nitrite Q3 Results | Net profit dips 3% to ₹202 crore, revenue at ₹2,009 crore

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Speciality chemicals maker Deepak Nitrite Ltd on Tuesday (February 13) reported a 3.4% year-on-year (YoY) decline in net profit at ₹202.1 crore for the third quarter that ended December 31, 2023.

In the corresponding quarter last year, Deepak Nitrite posted a net profit of ₹209.1 crore, the company said in a regulatory filing. The company’s revenue from operations increased 0.9% to ₹2,009.2 crore as against ₹1,991.1 crore in the corresponding period of the preceding fiscal.

At the operating level, EBITDA declined 3.1% to ₹304.8 crore in the third quarter of this fiscal over ₹314.6 crore in the corresponding period in the previous fiscal.

EBITDA margin stood at 15.2% in the reporting quarter as compared to 15.8% in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation.

The results came after the close of the market hours. Shares of Deepak Nitrite Ltd ended at ₹2,229.95, up by ₹33.45, or 1.52% on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Deepak Nitrite inks long-term deal with Petronet LNG for propylene & hydrogen supply

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Chemical manufacturing company Deepak Nitrite Ltd on Tuesday (December 19) said the company has received approval for a binding term sheet with Petronet LNG Ltd (PLL) for the offtake of 250 KTPA of propylene and 11 KTPA of hydrogen.

The agreement, sanctioned by the board of directors of Deepak Phenotics Ltd (DPL), a wholly-owned material subsidiary of Deepak Nitrite, signifies a significant step toward enhancing the company’s raw material supply.

“…we wish to inform you that the Board of Directors of Deepak Phenotics Ltd (DPL), a wholly-owned material subsidiary of Deepak Nitrite Ltd, has approved the execution of binding Term Sheet between DPL and Petronet LNG Ltd (PLL) for offtake of 250 KTPA of Propytene and 11 KTPA of Hydrogen from Petronet Petrochemical Project at Dahej, Gujarat for a period of 15 years from the date of first supply of Propytene and Hydrogen by PLL to DPL,” according to a stock exchange filing.

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The offtake is set to originate from the Petronet Petrochemical Project situated in Dahej, Gujarat. The binding term sheet outlines a 15-year agreement, effective from the date of PLL’s initial supply of propylene and hydrogen to DPL.

The approval from the board of directors of Deepak Phenotics Ltd paves the way for the eventual formulation of a definitive agreement, expected to be formalised in due course.

Shares of Deepak Nitrite Ltd ended at ₹2,293.90, down by ₹17.30, or 0.75%, on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Deepak Nitrite Q2 Results | Profit rises 18%, revenue declines 9%

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Chemical manufacturing company Deepak Nitrite Ltd on Tuesday (November 7) reported a 17.5% year-on-year (YoY) rise in net profit at ₹205.1 crore for the second quarter that ended September 30, 2023.

In the corresponding quarter last year, Deepak Nitrite posted a net profit of ₹174.5 crore, the company said in a regulatory filing. The company’s revenue from operations declined 9.4% to ₹1,778.1 crore against ₹1,961.7 crore in the corresponding period of the preceding fiscal.

At the operating level, EBITDA jumped 11.6% to ₹302.3 crore in the second quarter of this fiscal over ₹270.9 crore in the corresponding period in the previous fiscal.

The EBITDA margin stood at 17% in the reporting quarter compared to 13.8% in the year-ago period. EBITDA is earnings before interest, tax, depreciation, and amortisation.

The results came after the close of the market hours. Shares of Deepak Nitrite Ltd ended at ₹2,102.25, down by ₹36.60, or 1.71%, on the BSE.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Deepak Nitrite shares tank 4% but analyst sees more upside owing to better demand outlook

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Investor concerns around a phenol supply glut on account of large phenol capacity additions in China are unwarranted. These new additional phenol capacities will get almost fully absorbed by the polycarbonate capacity additions in China, said domestic brokerage house JM Financial in its report.

The recent commercialisation of chemical manufacturing company SABIC’s polycarbonate plant (3.6 percent of global polycarbonate capacity) will alone be able to capture 10 percent of China’s phenol capacity additions, the brokerage said.

According to JM Financial, due to the commercialisation of these capacities and China’s recent push in the construction sector, prices of polycarbonate have rebounded (polycarbonate pricing acts as a lead indicator for phenol pricing). This, in turn, is likely to have improved the demand outlook for phenol.

Owing to better demand outlook, JM Financial analysts have maintained a ‘Buy’ and raised their target prices to Rs 2,535 per share from Rs 2,420 per share earlier. This implies a 8.5 percent upside from the current market prices.

Deepak Nitrite’s profit declined in the first quarter of this fiscal (Q1FY24), missing analysts’ estimates. The company’s net profit fell 36.10 percent year-on-year to Rs 149.9 crore.

The company’s revenue fell 14.07 percent to Rs 1,768.34 crore in the June quarter. Ebitda declined 41.07 percent to Rs 209.75 crore, while margin came in at 11.86 percent.

Deepak Nitrite is one of the fastest-growing chemical intermediates companies with a diversified portfolio of products that caters to multiple industries.

Shares of Deepak Nitrite declined 4 percent to hit a day’s low of Rs 2,244.25 apiece in Tuesday’s trade. So far this year, the stock is up about 14 percent.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Deepak Nitrite Q1 Results | Net profit rises 36% to Rs 150 crore, revenue falls to Rs 1,768 crore

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Speciality chemicals maker Deepak Nitrite Ltd on Thursday (August 3) reported a 36.1 percent year-on-year (YoY) decline in net profit at Rs 149.9 crore for the first quarter that ended June 30, 2023.

In the corresponding quarter last year, Deepak Nitrite posted a net profit of Rs 234.6 crore, the company said in a regulatory filing.

In the quarter, total revenue stood at Rs 1,768.3 crore during the period under review, falling 14.1 percent against Rs 2,058 crore in the corresponding period of the preceding fiscal.

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At the operating level, EBITDA declined 41.1 percent to Rs 209.7 crore in the first quarter of this fiscal over Rs 356 crore in the corresponding period in the previous fiscal.

EBITDA margin stood at 11.9 percent in the reporting quarter as compared to 17.3 percent in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation.

On June 2, 2022, the company said an incident of fire occurred at one of its manufacturing sites in Nandesari, Gujarat. Property, equipment, and inventory worth crores of rupees were damaged and business was hit, resulting in overall damage of Rs 47.20 crore.

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The company received part payment from insurance companies towards claims against the loss of assets and inventories aggregating Rs 27.09 crore, which has been adjusted against the claims, as per the filing. Out of the Rs 27.09 crore, Rs 11.23 crore was received in March 2023, and the balance of Rs 15.86 crore was received in the June quarter, the company added.

The results came after the close of the market hours. Shares of Deepak Nitrite Ltd ended at Rs 2,023.45, up by Rs 11.05, or 0.55 percent on the BSE.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Deepak Nitrite arm to invest Rs 5,000 cr in Gujarat to manufacture speciality chemicals

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Deepak Nitrite arm Deepak Chem Tech has signed a Memorandum of Understanding with the Gujarat government with an intent to invest around Rs 5,000 crore in the next four years for setting up projects to manufacture Speciality Chemicals, Phenol/Acetone and Bisphenol at Dahej / Nandesari in the state.

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The pharmaceutical and agrochemicals industries rely on speciality chemicals to meet their needs. Acetone and phenol are utilised in a variety of end-user industries, including laminates, plywood, pharmaceuticals, paint, and adhesives. The most significant feedstock for polycarbonate, which has numerous uses in the fields of automotive, electrical and consumer goods, defence, and medical equipment is bisphenol, which is used in epoxy and adhesives.

One of the main things that were anticipated during the company’s March quarter update was the utilisation rates of the Nandesari facility and updates on other capex that were being implemented. In a brokerage study, MOSL stated that “if the company ventures into speciality or complex products, it would command a better valuation.” The results for the March quarter at Deepak Nitrite were largely in-line with street estimates.

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Shares of the company surged following this announcement and have recovered more than 2 percent from intra-day lows.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Deepak Nitrite shares recover from day’s low despite 12.5% profit drop in March quarter

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of chemical intermediates manufacturer Deepak Nitrite fell over 3 percent on Friday after the company reported a double-digit drop in its net profit for the March quarter.

Deepak Nitrite reported a 12.5 percent drop in its net profit for the March quarter, compared to the same period last year. However, the figure of Rs 234 crore was higher than the Motilal Oswal estimate of Rs 221 crore.

Revenue for the quarter increased by 4.8 percent year-on-year to Rs 1,961 crore. However, the figure was marginally lower than the Motilal Oswal estimate of Rs 2,020 crore.

The topline also includes government incentives of Rs 17 crore.

Its operational profit or earnings before interest tax depreciation and amortisation (EBITDA) declined 15.2 percent Year-on-Year to Rs 348 crore in the March quarter compared to Rs 410 crore a year ago, but was higher than the estimate of Rs 333 crore.

Operating margins at 17.7 percent were also better than the estimate of 16.5 percent but lower than 21.9 percent in the March quarter of financial year 2022. Adjusting for the government income, margin would be at 17 percent.

Margin for the advanced intermediates segment declined to 17.1 percent from 26.8 percent in the year-ago period. Margin of Phenolics segment also fell to 15.1 percent from 15.7 percent last year.

The board of the company also approved a dividend of Rs 7.5 for the financial year 2023.

Brokerage firm Yes Securities said that volatility in raw material and energy costs during the year, along with the fire accident at Nandesari plant impacted the company’s earnings during the year.

Shares of Deepak Nitrite have recovered from the day’s low and are currently trading 0.8 percent to Rs 1,942 crore.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Deepak Nitrite Q4 net profit drops 12%, declares dividend

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Deepak Nitrite Ltd on Thursday, May 11, posted a 12.5 percent year-on-year (YoY) drop in net profit at Rs 233.9 crore for the fourth quarter that ended March 31, 2023. In the corresponding quarter last year, the company posted a net profit of Rs 267.2 crore.

In the March quarter, total revenue stood at Rs 1,961.4 crore, up 4.8 percent against Rs 1,872.4 crore in the corresponding period of the preceding fiscal, the company said in an exchange filing.

At the operating level, EBITDA declined 15.2 percent to Rs 348 crore in the fourth quarter of this fiscal over Rs 410.3 crore in the corresponding period in the previous fiscal.

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The EBITDA margin stood at 17.7 percent in the reporting quarter compared to 21.9 percent in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation.

The board of directors of the company has recommended a dividend of Rs 7.50, 375 percent, per equity share for the year ended March 31, 2023, the company added.

Shares of Deepak Nitrite Ltd ended at Rs 1,926.55, down by Rs 31.25, or 1.60 percent on the BSE.

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow