Improvement in revenues was led by robust Y-o-Y improvement in the phenolics business aided by incremental contribution from Isopropyl Alcohol (IPA) products. Profit before tax grew by 37.7% to Rs 290.3 crore in Q3 FY21 over Q3 FY20. Current tax expense spiked 25.5% to Rs 63.64 crore in Q3 FY21 over Q3 FY20.

EBITDA stood at Rs 340 crore in Q3 FY21, up 25% over Q3 FY20. EBITDA margin grew by 330 basis points to 27.4% in Q3 FY21 over Q3 FY20. Margin accretion has been driven by the increased volumes and higher efficiency in plant operations of the phenolics business supported by better sourcing, logistics and marketing for the wider product basket including IPA, which commenced in Q1 of the current fiscal.

Commenting on the Q3 performance, Deepak Mehta, chairman & MD said, "Our financial performance in Q3 is indicative of the underlying resilience of our business. Excellent team work, improved operations including more active marketing and logistics have enabled us to grab the opportunities arising from the sharp rebound in India's overall economic activity following several months of lockdown. In the backdrop of volatile input prices and persistent sluggishness in some end-use industries like oil, paper, textile we have achieved a strong sequential recovery in both revenues and profitability. This is attributable to our diversified product portfolio supported by deep expertise and decades of manufacturing experience enabling us to relentlessly enhance our offerings to meet the stringent requirements of our global clientele. Running the Phenolics plant beyond 100% stated capacity on a sustainable basis is a result of excellent teamwork and meticulous co-ordination of functions like sourcing, logistics, material management and human resources. As a result, we have grown PBT, both standalone and consolidated, in each successive quarter this fiscal and expect the trend to continue in Q4."

In its outlook, DNL said, "Successful Vaccine Diplomacy by the Indian Government has helped to elevate the status and competence of Indian manufacturing sector in the eyes of the world. This is expected to have a multi-layered impact. Immediate impact will be the continued shift from China to India for manufacture of chemicals. India is already a lucrative market for the chemical industry and DNL is an ideal aspirant to ride on the India chemical manufacturing theme alongside its diversified product mix with decades of manufacturing experience. Impetus given by the Budget to enable the growth environment, principle of Aatmanirbhar Bharat and focus of the PLI scheme to incentivise manufacturing in India is expected to lead to increased volume of manufacturing of other industries such as electronics, automotives, engineered components, paper, textiles, pharmaceuticals, etc. which will widen and deepen the ecosystem contributing to more robust local demand."

"DNL is also setting the platform for continued growth through planned introductions of newer products and projects. The company is witnessing encouraging demand scenario across several end user industries, and that is expected to continue as it moves ahead. Second phase of the IPA plant is progressing well and remains on track to be commissioned in the fourth quarter. Brownfield expansion at Nadesari plant along with other downstream products in the Phenolics business also contribute to the strong outlook."

Shares of DNL fell 1.8% to Rs 1110.1 on Friday. DNL is one of the leading supplier of chemical intermediates. It has a diversified portfolio of intermediates that cater to the dyes and pigments, agrochemical, pharmaceutical, plastics, textiles, paper and home and personal care segments in India and overseas.