Commodity Chemicals company Deepak Fertilisers & Petrochemicals Corporation announced Q1FY24 results:
- Operating Revenue of Rs 2,313 crore compared to Rs 3,031 crore, down 23.7% YoY
- Operating EBITDA of Rs 281 crore compared to Rs 740, down 62.1% YoY
- EBITDA Margins of 12.1% compared to 24.4% in Q1FY23
- Net Profit of Rs 114 crore compared to Rs 436 crore, down 73.9% YoY
- Net Profit Margin of 4.9% compared to 14.3%, down 945 bps
Commenting on the performance, Sailesh C. Mehta, Chairman & Managing Director: “Despite facing various challenges in our Chemical and Fertiliser businesses during the Q1 FY24, we remained resilient and committed to growth.
- We encountered adverse price fluctuations in TAN due to the dumping of cheap Russian FGAN into India, as Russian products found resistance in countries sympathetic to the Ukraine cause.
- NA sales volumes were better YoY although NA production was impacted on account of the extended shutdown, while IPA sales volumes exceeded expectations with more favourable market conditions and SGQR implementation.
- Reduced NBS subsidy on channel inventory of Rs 161 crore and delayed monsoons impacted our Crop Nutrition business.
As it was envisaged in the post-Covid swing back of prices of Raw Materials and Finished Products, it was expected that in a quarter or so, there is a possibility of gaps in margins as the re-calibration between RM and FG settles back into a fair and balanced equilibrium (which has been the typical long-term average).
The Q1 quarter price swings seemed a transitory quarter in this journey of finding the typical balance.
I am delighted to announce the successful commencement of trial production at our greenfield Ammonia facility in Taloja. We are passionately advancing toward its commercial production. The successful backward integration into Ammonia will provide long-term risk mitigation on the Supply disruption risk for all three businesses of the group. This strategic investment shall not only generate returns to our shareholders but also benefits the Indian economy by reducing import dependence and creating local employment opportunities.”