Deepak Fertilisers scales 30-month high as promoter hikes stake

Robust Marketing Services Private Limited, the promoter of the company, acquired 685,872 equity shares worth of Rs 13.16 crore through open market between February 25 and March 13.

Shares of Deepak Fertilisers and Chemicals hit a 30-month high of Rs 248.50, up 6 per cent on the BSE in intra-day trade on Wednesday after the promoter increased its stake in the firm via the open market. The stock was trading at its highest level since September 2018. In the past one month, it has zoomed 56 per cent as compared to a 3.3 per cent decline in the S&P BSE Sensex.

The disclosure made by Deepak Fertiliser to the stock exchange reveals that Robust Marketing Services Private Limited, the promoter of the company, acquired 685,872 equity shares worth Rs 13.16 crore through the open market between February 25 and March 13. Post acquisition, Robust Marketing Services Private Limited holding in Deepak Fertilisers increased to 10.25 per cent from 9.58 per cent earlier.

With past one month's rally, the stock of Deepak Fertilisers has zoomed nearly 350 per cent from its 52-week low of Rs 55.29 touched on March 19, 2020. The company had reported a robust operational performance during the first nine months (April-December) of the current financial year 2020-21 (9MFY21).

Total operating earnings before interest, taxes, depreciation, and amortization (Ebitda) increased 98 per cent year-on-year (YoY) to Rs 682 crore in 9MFY21. Ebitda margin expanded by 595 basis points (bps) to 16.1 per cent in 9MFY21. The company’s finance cost during the period reduced significantly by 24 per cent, primarily driven by significant efforts towards improving collections and better working capital management, thereby reducing the short-term borrowings.

The crop nutrition division (CNB) business delivered its fifth consecutive profitable quarter in a row. The overall performance of the industrial chemical (IC) business significantly improved year-on-year, primarily driven by the robust demand for Nitric Acid. A similar trend is seen even in the exports markets which favoured us in improving our business margins and overall growth, the management said.

"Furthermore, the recently announced Budget by the government has laid additional emphasis in boosting national infrastructure, which is the backbone of any developing nation. We anticipate our Technical Ammonium Nitrate (TAN) business to significantly benefit from the infrastructure spending. Since most of our businesses cater to the critical sectors of the economy, we are confident of continuing our growth momentum on the back of robust GDP growth for India in the coming years," it said.