For the quarter, sales from the bulk and chemicals segment (BCC) stood at Rs 189.24 crore and accounted for 50% of sales. PBIT from the same was up by 33% to Rs 28.34 crore and accounted for 52% of total.

For the quarter, sales from the Fine & Specialty chemicals (FSC) Segment stood at Rs 122.39 crore and accounted for 32% of sales. PBIT from the same was higher by 48% to Rs 26.21 crore and accounted for 50% of total.

For the quarter, sales from the Performance product (PP) segment stood at Rs 67.36 crore and accounted for 18% of sales. PBIT from the same stood at Rs 1.29 crore as compared to loss of Rs 6.04 crore for Dec 16 quarter.

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

"I am elated to share that for the quarter and nine-month period, we have reported exalted financials with strong growth and improved profitability on a year-on-year basis.

There has been considerable volatility in prices of inputs and finished goods as well as in forex rates. Despite these challenges, we have selectively pursued opportunities in domestic and export markets, enabling us to grow volumes across all SBUs. We are especially heartened by the performance of the Basic Chemicals and Performance Products segment which has delivered enhanced profitability due to robust demand from local customers who are benefiting from supply disruptions in China.

We are on the cusp of commissioning- our Greenfield mega project for production of Phenol & Acetone. This global scale plant, aligned to the Make-in-India initiative, is poised to commence commercial operations shortly. This will elevate our performance and the opportunities for forward integration will open up new platforms for growth in the ensuing years."

Performance for the 9 months ended Dec 17

For 9 Months ended Dec 17, net sales post the adjustment of insurance claim received by the company, were up by 17% on YoY basis and stood at Rs 1063.50 crore.

The OPM up by around 110 bps compared to 11.8% in 9 Months ended Dec 16. Thus, OP was higher by 27% to Rs 155.03 crore. Other income was lower by 4% to Rs 3.93 crore in 9 Months ended Dec 17. Interest costs was higher by 29% to Rs 29.21 crore and depreciation was higher by 7% to Rs 38.57 crore. PBT was thus higher by 38% to Rs. 72.85 crore in 9 Months ended Dec 17. There was an EO income of Rs 18.33 crore for 9 Months ended Dec 17 pertaining to Insurance claim on loss of profits for Roha plant as compared to an EO income of Rs 70.77 crore for 9 Months ended Dec 16 pertaining to transfer of its leasehold rights. Thus, PBT after EO for 9 Months ended Dec 17 stood at Rs 91.18 crore, down by 26% YoY. Total tax was lower by 18% to Rs 28.05 crore on YoY. Finally, PAT came in at Rs. 63.13 crore in 9 Months ended Dec 17 down by 29% YoY.

For the 9 months, sales from the bulk and chemicals segment (BCC) stood at Rs 549.52 crore and accounted for 49% of sales. PBIT from the same was up by 31% to Rs 78.16 crore and accounted for 50% of total.

For the 9 months, sales from the Fine & Specialty chemicals (FSC) Segment stood at Rs 342.06 crore and accounted for 31% of sales. PBIT from the same was up by 25% to Rs 84.73 crore and accounted for 54% of total.

For the 9 months, sales from the Performance product (PP) segment stood at Rs 217.34 crore and accounted for 20% of sales. Loss at PBIT level stood at Rs 5.25 crore as compared to loss of Rs 13.22 crore for 9 Months ended Dec 16.

Other highlights

Domestic revenues stood at Rs. 227.38 crore in Q3 FY18 from Rs. 167.13 crore in the same period last year, representing growth of 31% Y-o-Y. This has been driven by higher demand from customers in the local market, who are benefitting from supply disruption in China.

Revenues from exports came in at Rs. 139.73 crore in Q3 FY18 compared to Rs. 112.66 crore in Q3 FY17 higher by 24%. Export performance was supported by encouraging demand trends in key geographies.

Revenues from the BC segment stood at Rs. 189.24 crore in Q3 FY18 compared to Rs. 170.14 crore in Q3 FY17. Stronger demand from local customers as well as improving trends in domestic consumption has driven the revenue traction.

Revenues from FSC segment were Rs. 122.39 crore in Q3FY18, higher by 46% compared to Rs.84.04 crore in Q3 FY17. Resumption of normal operations and shifts in product mix were key drivers of growth.

The PP segment reported revenues of Rs. 67.36 crore in Q3 FY18 compared to Rs. 50.90 crore in Q3 FY17, representing a growth of 32% y-o-y. Volume growth due to healthy demand as well as improved pricing contributed to growth.

Update on Phenol and Acetone Project

Introduction:

DNL is implementing a mega project, aligned with Make in India, to manufacture 200,000 MTPA of Phenol and 120,000 MTPA of the co-product Acetone. This will be supported by capacity to manufacture 260,000 MT of Cumene, which is a feedstock for manufacturing Phenol and Acetone. This project is being implemented in a 100% subsidiary, i.e. Deepak Phenolics Limited. The proposed Phenol Plant will be located at Dahej in the State of Gujarat, with a capital expenditure of Rs. 1,400 crore being funded by debt and equity in the ratio 60: 40. DPL will address the opportunity in the domestic market which is currently met by imports. In addition, its plant is being based on cutting-edge technology and will be resource and energy efficient. Local availability of Phenol and Acetone is expected to boost the production of derivatives and downstream intermediates, which will expand the overall market in the country.

Progress:

The Greenfield project has now entered the last lap of construction completion and finishing work. There has been enhanced focus on operational readiness and flawless start-up for which technology provider's team is at the project site and has commenced the final checks.

Outlook

Deepak Nitrite is favourably positioned to capture opportunities emerging across the chemicals and speciality chemicals landscape. China, which is the world's largest supplier for multiple chemicals and specialty chemicals, has enhanced its focus on environmental protection and sustainable manufacturing processes. As a result, local Chinese producers are faced with higher cost of operations which will increase the landed cost of chemicals. This has improved the competitiveness of alternate suppliers, opening up opportunities for established players with proven capabilities and abundant capacity such as Deepak Nitrite.

The Greenfield project of the Company for manufacture of Phenol & Acetone is set to commence commercial operations shortly. This will make Deepak Phenolics Ltd., the company's wholly owned subsidiary a market leader for Phenol & Acetone in the country and also open up new frontiers of growth for DNL. The outlook remains favourable as phenol is finding new applications resulting in increased local demand, which has now crossed 300,000 tonnes per annum. As the local supply is limited, there has been an increase in imports. Further, the availability of raw materials in the local market has eased considerably while margins are improving as a result of infrastructure led growth in the downstream market globally. The combination of these factors is contributing to a strong tailwind ahead of the commissioning.