Other income rose 113.42% to Rs 8.43 crore.  PBIDT rose 41.24% to Rs 394.97 crore.  Profit before interest, tax and other unallocable items (PBIT) have jumped 30.73% to Rs 352.54 crore.  PBIT of Fine & Speciality Chemicals segment fell 40.60% to Rs 60.10 crore (accounting for 17.05% of total PBIT).  PBIT of Phenolics segment rose 79.35% to Rs 220.39 crore (accounting for 62.51% of total PBIT).  PBIT of Basic Chemicals segment rose 52.87% to Rs 62.48 crore (accounting for 17.72% of total PBIT).  PBIT of Performance Products segment rose 101.47% to Rs 9.57 crore (accounting for 2.71% of total PBIT). 

PBIT margin of Fine & Speciality Chemicals segment fell from 48.20% to 30.44%.  PBIT margin of Phenolics segment fell from 22.53% to 19.38%.  PBIT margin of Basic Chemicals segment fell from 23.73% to 23.36%.  PBIT margin of Performance Products segment rose from 7.09% to 9.13%.  Overall PBIT margin fell from 27.12% to 20.66%. 

Provision for interest fell 52.78% to Rs 9.24 crore.  PBDT rose 48.31% to Rs 385.73 crore.  Provision for depreciation rose 41.01% to Rs 44.05 crore.  Profit before tax grew 49.31% to Rs 341.68 crore.  Provision for tax was expense of Rs 87.34 crore, compared to Rs 58.65 crore.  Effective tax rate was 25.56% compared to 25.63%.

Net profit attributable to owners of the company increased 49.44% to Rs 254.34 crore. 

Equity capital stood at Rs 27.28 crore as of 30 September 2021 to Rs 27.28 crore as of 30 September 2020.  Per share face Value remained same at Rs 2.00. 

Promoters’ stake was 45.69% as of 30 September 2021 ,compared to 45.69% as of 30 September 2020 . 

Commenting on the performance, Mr. Deepak C. Mehta, Chairman & Managing Director, said,

“I’m glad to see the best of DNL once again brought to the fore in the face of challenges ranging from COVID, raw material and freight fluctuation and energy costs. This is a testament to the kind of systems and people we have in place to deliver sustainable results.

We are embarking on the next phase of our transformation into a diversified chemical company that has the dual capability to maintain its leadership position in its existing value chain while applying itself to innovative new platforms and products. I anticipate a deeper partnership between Deepak and its strategic customers as significant volumes of our current and future products are supplied as part of long term, formula linked arrangements. In the meanwhile, the company will continue to place a high degree of importance to the twin pillars of process intensification and operational excellence in a responsible and sustainable manner.

Growth going forward will be driven by planned expansion initiatives across SBUs and tactical introduction of several downstream chemicals and complex chemical platforms. We remain focused on our agility enabling us to capitalise on opportunities that emerge from rapid shifts across the industry landscape. Our entry into newer solvents will diversify our product portfolio, expand our client base, and increase the percentage of complex, high-margin products in the mix, thereby enhancing our business proposition."

For year-to-date (YTD) results analysis

Net sales of Deepak Nitrite has increased 93.01% to Rs 3207.57 crore.  Sales of Fine & Speciality Chemicals segment has gone up 15.64% to Rs 404.35 crore (accounting for 12.42% of total sales).  Sales of Phenolics segment has gone up 143.69% to Rs 2,135.98 crore (accounting for 65.63% of total sales).  Sales of Basic Chemicals segment has gone up 62.01% to Rs 516.38 crore (accounting for 15.87% of total sales).  Sales of Performance Products segment has gone up 56.12% to Rs 198.06 crore (accounting for 6.09% of total sales).  Inter-segment sales rose Rs 9.96 crore to Rs 47.20 crore. 

Operating profit margin has declined from 27.53% to 26.13%, leading to 83.15% rise in operating profit to Rs 838.04 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 50.24% to 59.51%.   Employee cost decreased from 7.22% to 4.16%.   Other expenses fell from 15.47% to 10.91%.   Power and Oil fuel cost fell from 6.46% to 5.78%.  

Other income rose 59.62% to Rs 16.68 crore.  PBIDT rose 82.62% to Rs 854.72 crore.  Profit before interest, tax and other Unallocable items (PBIT) has jumped 79.04% to Rs 794.39 crore.  PBIT of Fine & Speciality Chemicals segment fell 22.46% to Rs 127.51 crore (accounting for 16.05% of total PBIT).  PBIT of Phenolics segment rose 166.43% to Rs 507.65 crore (accounting for 63.90% of total PBIT).  PBIT of Basic Chemicals segment rose 90.90% to Rs 147.55 crore (accounting for 18.57% of total PBIT).  PBIT of Performance Products segment rose 2.28% to Rs 11.68 crore (accounting for 1.47% of total PBIT). 

PBIT margin of Fine & Speciality Chemicals segment fell from 47.03% to 31.53%.  PBIT margin of Phenolics segment rose from 21.74% to 23.77%.  PBIT margin of Basic Chemicals segment rose from 24.25% to 28.57%.  PBIT margin of Performance Products segment fell from 9.00% to 5.90%.  Overall PBIT margin fell from 26.54% to 24.41%. 

Provision for interest fell 54.45% to Rs 20.18 crore.  PBDT rose 96.95% to Rs 834.54 crore.  Provision for depreciation rose 40.74% to Rs 87.61 crore. 

Profit before tax grew 106.63% to Rs 746.93 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 189.96 crore, compared to Rs 92.34 crore.  Effective tax rate was 25.43% compared to 25.54%.

Net profit attributable to owners of the company increased 106.94% to Rs 556.97 crore. 

Full year results analysis

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%. Power and Oil fuel cost fell from 6.78% to 6.06%.  

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.  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%.

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 . 

Cash flow from operating activities increased to Rs 999.04 crore for year ended March 2021 from Rs 764.66 crore for year ended March 2020.  Cash flow used in acquiring fixed assets during the year ended March 2021 stood at Rs 209.56 crore, compared to Rs 417.43 crore during the year ended March 2020. 

The scrip is currently trading at Rs 1898