Deepak Fertilisers gains 12% after falling 26% in seven trading sessions

The stock was up 12 per cent to Rs 119 on BSE on back of heavy volumes after the company gave a clarification on rumors in capital market with respect to the outstanding commercial papers

Shares of Deepak Fertilisers and Petrochemicals were up 12 per cent at Rs 119 apiece on  BSE on the back of heavy volumes after the company gave a clarification on rumours in capital market with respect to the outstanding commercial papers.

In the past seven trading days, the stock of commodity chemicals company has tanked 26 per cent, as compared to a marginal a 0.33 per cent fall in the S&P BSE Sensex till Thursday. It hit a five-year low of Rs 104.80 on BSE in the intra-day trade yesterday.

Deepak Fertilisers said the company has been repaying commercial papers in accordance with the due dates and has repaid its last commercial papers on the due date in the current month. “We would like to clarify that there are no commercial papers outstanding as on date payable by the company or any of its subsidiaries. We would be happy if the above clarifications are shared with the investing community in order to provide the factual position,” the company said in a regulatory filing.

Meanwhile, the market price of Deepak Fertilisers has nearly halved from level of Rs 210 on November 11, 2018, after the company reported a disappointing set of numbers for the quarter ended September 2018 (Q2FY19). It had posted 56 per cent decline in net profit at Rs 19 crore in Q2FY19 compared to Rs 43 crore in Q2FY18.

The profitability of an Is Propyl Alcohol (IPA) remained under pressure due to inability to pass through higher raw material cost (Refinery Grade Propylene or RGP up by around 47 per cent y-o-y) on account of import price parity. The higher global prices of phosphoric acid and liquefied natural gas (LNG), and a lag in transferring its impact in the new MRPs have led to the underperformance of the segment in the quarter. The lower availability of phosphoric acid also led to lower capacity utilization, the company said in the statement.

The availability of phosphoric acid is expected to improve in H2 FY2019 as the acid from alternate sources has been successfully tested in the plant. This is expected to improve the capacity utilization of fertilizer plant by 45-50 per cent in H2FY19 as compared to H1FY19, it added.

At 10:47 am, Deepak Fertilisers was trading 9 per cent higher at Rs 116 on BSE, as compared to a 0.61 per cent rise in the S&P BSE Sensex. The trading volumes on the counter jumped nearly six-fold with a combined 2.93 million equity shares changed hands on the BSE and NSE so far.