Operating profit margin has jumped from 24.83% to 31.07%, leading to 73.48% rise in operating profit to Rs 454.66 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 56.17% to 53.39%. Employee cost decreased from 5.30% to 3.90%. Other expenses fell from 13.14% to 12.27%.

Other income rose 170% to Rs 5.94 crore. Profit before interest, tax and other unallocable items (PBIT) have jumped 71.12% to Rs 420.25 crore. PBIT of Fine & Speciality Chemicals segment rose 57.09% to Rs 79.71 crore (accounting for 18.97% of total PBIT). PBIT of Phenolics segment rose 319.47% to Rs 266.78 crore (accounting for 63.48% of total PBIT). PBIT of Basic Chemicals segment rose 26.56% to Rs 70.71 crore (accounting for 16.83% of total PBIT). PBIT of Performance Products segment fell 95.95% to Rs 3.05 crore (accounting for 0.73% of total PBIT).  

PBIT margin of Fine & Speciality Chemicals segment rose from 32.11% to 38.70%. PBIT margin of Phenolics segment rose from 11.98% to 28.46%. PBIT margin of Basic Chemicals segment rose from 24.76% to 28.84%. PBIT margin of Performance Products segment fell from 49.09% to 3.52%. Overall PBIT margin rose from 22.99% to 28.48%.  

Provision for interest fell 47.79% to Rs 14.2 crore. Provision for depreciation rose 55.84% to Rs 56.46 crore. Profit before tax grew 94.14% to Rs 389.94 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 99.83 crore, compared to Rs 28.55 crore. Effective tax rate was 25.60% compared to 14.21%. Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 68.37% to Rs 290.11 crore.

Commenting on the performance, Mr. Deepak C. Mehta, Chairman & Managing Director, said, "In April, 2020, we decided that the company would prioritize both lives and livelihoods. That financial targets were exceeded was an unexpected outcome. The company ensured that all its locations operated with the highest attention to man and material safety. We have also taken up the responsibility of vaccinating all our employees and spouses and will continue to look for opportunities to provide succour to the 2,000 families that depend on us. The company, in partnership with Deepak Foundation has put up a 40 bed COVID hospital with ICU and oxygen beds, purchased oxygen PSA plants to be deployed at nearby facilities and has taken other appropriate measures. DNL also expanded medical and life insurance coverage for all employees.  

Due to the volatility in external environments, the best option for DNL was to become more nimble-footed. The company paid very close attention to internal processes of people management, supply chain and operations and worked to maximize productivity wherever possible. The company gained value from these focused efforts in terms of crossing 115% capacity on the phenol plant, while at the same time optimizing product mix particularly in the Fine and Speciality SBU. As always, the wide range of Deepak's products helped it to overcome some businesses whose demand was affected by COVID/ oil crisis such as fuel additives and paper chemicals. R&D investments have continued and we are in the process of building a world class Technology Center in Vadodara. 

The company has continued to develop its core technology platforms that include nitration, reduction and diazotization. It is investing around 300 crore into products that utilise its core platforms for new agrochemical and pharmaceutical intermediates. Introduction of new platforms including fluorination and photochlorination are also being undertaken. The new investment is expected to be completed by the second half of next year. I am also happy to note that that new products that are being taken up score high marks on DNL's ‘Right to Win' checklist. 

Looking ahead, I am confident that our efforts will continue to build a redoubtable balance sheet and brand equity which is in line with our values"

FY21 consolidated performance 

Net sales (including other operating income) of Deepak Nitrite has increased 3.07% to Rs 4359.75 crore. Sales of Fine & Speciality Chemicals segment has gone up 30.46% to Rs 763.55 crore (accounting for 17.39% of total sales). Sales of Phenolics segment has gone up 27.97% to Rs 2,560.50 crore (accounting for 58.31% of total sales). Sales of Basic Chemicals segment has gone down 18.84% to Rs 763.17 crore (accounting for 17.38% of total sales). Sales of Performance Products segment has gone down 60.35% to Rs 304.18 crore (accounting for 6.93% of total sales). Inter-segment sales came down from Rs 63.85 crore to Rs 31.65 crore.  

Operating profit margin has jumped from 24.25% to 28.60%, leading to 21.57% rise in operating profit to Rs 1,247.03 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 55.85% to 52.05%. Employee cost increased from 5.16% to 5.65%. Other expenses fell from 14.59% to 13.76%.  

Other income fell 38.86% to Rs 21.52 crore. Profit before interest, tax and other unallocable items (PBIT) has jumped 19.51% to Rs 1,183.80 crore. PBIT of Fine & Speciality Chemicals segment rose 90.44% to Rs 333.73 crore (accounting for 28.19% of total PBIT). PBIT of Phenolics segment rose 237.71% to Rs 632.57 crore (accounting for 53.44% of total PBIT). PBIT of Basic Chemicals segment fell 6.92% to Rs 194.87 crore (accounting for 16.46% of total PBIT). PBIT of Performance Products segment fell 94.59% to Rs 22.63 crore (accounting for 1.91% of total PBIT).  

PBIT margin of Fine & Speciality Chemicals segment rose from 29.94% to 43.71%. PBIT margin of Phenolics segment rose from 9.36% to 24.70%. PBIT margin of Basic Chemicals segment rose from 22.26% to 25.53%. PBIT margin of Performance Products segment fell from 54.57% to 7.44%. Overall PBIT margin rose from 23.07% to 26.96%.  

Provision for interest fell 35.41% to Rs 74.2 crore. Loan funds declined from Rs 1,043.24 crore as of 31 March 2020 to Rs 539.34 crore as of 31 March 2021. Inventories declined from Rs 394.50 crore as of 31 March 2020 to Rs 382.69 crore as of 31 March 2021. Sundry debtors were higher at Rs 756.30 crore as of 31 March 2021 compared to Rs 612.72 crore as of 31 March 2020. Cash and bank balance rose to Rs 33.43 crore as of 31 March 2021 from Rs 31.40 crore as of 31 March 2020. Investments rose to Rs 189.29 crore as of 31 March 2021 from Rs 2.38 crore as of 31 March 2020 .  

Provision for depreciation rose 9.23% to Rs 152.63 crore. Fixed assets increased to Rs 2,042.45 crore as of 31 March 2021 from Rs 1,974.18 crore as of 31 March 2020. Intangible assets increased from Rs 30.07 crore to Rs 41.73 crore.  

Profit before tax grew 29.18% to Rs 1,041.72 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 265.91 crore, compared to Rs 195.37 crore. Effective tax rate was 25.53% compared to 24.23%. 

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 26.97% to Rs 775.81 crore.  

Promoters' stake was 45.69% as of 31 March 2021 compared to 45.69% as of 31 March 2020 .  

The scrip is currently trading at Rs 1803