DEEPAKNTR - Deepak Nitrite

📊 NSE: DEEPAKNTR 🏢 Chemicals 📅 Last Updated: 12/13/2025 21:27

💰 Financial Performance

Revenue Growth by Segment

In FY 2024-25, the Phenolics segment (DPL) grew 16% YoY to reach INR 5,805 Cr, driven by strong demand for Phenol and Acetone. The Advanced Intermediates (AI) segment recorded revenue of INR 2,527 Cr. In Q2 FY26, Phenolics revenue grew 2% sequentially to INR 1,333 Cr, while AI revenue stood at INR 588 Cr.

Geographic Revenue Split

For FY 2024-25, the revenue mix was 84% Domestic (INR 6,923 Cr) and 16% Exports (INR 1,359 Cr). In Q2 FY26, the domestic share increased slightly to 86% (INR 1,632 Cr) with exports at 14% (INR 270 Cr).

Profitability Margins

Consolidated PAT for FY 2024-25 was INR 697 Cr with a PBT of INR 953 Cr. In Q2 FY26, PAT stood at INR 119 Cr (up 6% QoQ) and PBT at INR 163 Cr (up 5% QoQ). Profitability is being supported by efficiency gains despite global pricing volatility.

EBITDA Margin

Consolidated EBITDA margin for FY 2024-25 was 14% (INR 1,176 Cr). In H1 FY26, margins compressed to 11% (INR 438 Cr) due to external headwinds. However, Q2 FY26 saw a sequential improvement of 100 basis points to 12% (INR 224 Cr) as pricing trends stabilized.

Capital Expenditure

The company is executing sizeable capex through Deepak Chem Tech Limited (DCTL), including India's first integrated polycarbonate project and a mega complex. As of March 31, 2025, the company maintained a resilient position with gross debt of INR 1,170 Cr and cash/liquid investments of INR 900 Cr to fund these initiatives.

Credit Rating & Borrowing

ICRA reaffirmed ratings at [ICRA]AA/A1+ but revised the outlook from Positive to Stable in August 2025 due to large-scale capex. The company maintains low leverage with a net debt of only INR 256 Cr as of March 2025.

⚙️ Operational Drivers

Raw Materials

Key feedstocks include Benzene, Propylene, and Ammonia (implied by Phenol/Nitrite production). Long-term feedstock arrangements for gas are secured with Petronet LNG.

Import Sources

Sourced both domestically and internationally; specific countries are not listed, but the company is actively pursuing import substitution under 'Atmanirbhar Bharat' to reduce reliance on Asian imports.

Key Suppliers

Petronet LNG is a primary strategic supplier for long-term feedstock arrangements.

Capacity Expansion

Expanding into downstream products like MIBK, MIBC, and Polycarbonate. The AI segment is undergoing both brownfield and greenfield expansions via DCTL to deepen integration.

Raw Material Costs

Raw material costs were impacted by global pricing volatility and supply chain disruptions. The company uses vertical integration (backward and forward) to mitigate these costs, achieving significant savings.

Manufacturing Efficiency

Consolidated ROCE is reported at 14%. Efficiency gains in the Phenolics segment helped maintain steady performance despite a 16% revenue increase in a volatile pricing environment.

📈 Strategic Growth

Expected Growth Rate

8.60%

Growth Strategy

Growth will be driven by the 'China+1' strategy, a mega-investment in an integrated Polycarbonate project, and the operationalization of downstream products like MIBK and MIBC. The company is also focusing on CDMO and CMO partnerships to attract global players.

Products & Services

Phenol, Acetone, Isopropyl Alcohol (IPA), Sodium Nitrite, Sodium Nitrate, Nitric Acid, MIBK, MIBC, and Polycarbonate (planned).

Brand Portfolio

Deepak Nitrite, Deepak Phenolics (DPL), Deepak Chem Tech (DCTL).

New Products/Services

Launching MIBK (Methyl Isobutyl Ketone) and MIBC (Methyl Isobutyl Carbinol) in upcoming quarters, alongside the landmark Polycarbonate project.

Market Expansion

Expanding geographical footprint and tapping into emerging applications in construction, homecare, textiles, and pigments.

Market Share & Ranking

DNL holds a leading market position in most of its products (Sodium Nitrite/Nitrate) domestically and globally. It recently expanded market share in the Phenolics segment.

Strategic Alliances

Strategic partnerships in the CDMO and CMO space are being attracted by the group's reinforced brand value and HSE practices.

🌍 External Factors

Industry Trends

The industry is shifting toward cost optimization, decarbonization, and 'China+1' sourcing. DNL is positioning itself as a reliable alternative to Chinese suppliers.

Competitive Landscape

Faces intense competition from Asian producers (particularly China) who are pushing excess capacity into the Indian market at low prices.

Competitive Moat

Moat is built on high vertical integration, a 50-year track record, and being the first in India to produce certain integrated products like Polycarbonate, which creates high entry barriers.

Macro Economic Sensitivity

Sensitive to global chemical industry cycles; the global market is expected to grow from $5.61 trillion in 2024 to $8.58 trillion by 2029.

Consumer Behavior

Increased demand for sustainable and reliably sourced chemicals is driving global giants toward DNL's diversified portfolio.

Geopolitical Risks

Impacted by U.S. tariffs, geopolitical tensions affecting supply chains, and economic slowdowns in the EU and China.

⚖️ Regulatory & Governance

Industry Regulations

Operations are aligned with 'Atmanirbhar Bharat' and national priorities for self-reliance in critical chemicals.

Environmental Compliance

Investing in renewable energy (60-70% target) and digital transformation to reduce emission scores and improve HSE (Health, Safety, and Environment) standards.