Deepak Fertilisers reports substantial fall in Q1 revenue, profit

Deepak Fertilisers and Petrochemicals Corporation (DFPC) has reported that its consolidated revenue during the April to June quarter almost halved to Rs 1,122 crore from Rs 2,226 crore in the corresponding period of previous fiscal year.

The profit after tax too nosedived to Rs 10.7 crore from Rs 37.23 crore in the same period.

"The scenario for crop nutrition industry remained challenging during Q1 FY20, impacted by the weak onset of monsoon, resulting in delayed crops sowing," said Chairman and Managing Director Sailesh Mehta. This has been partially offset by softening of major raw material prices, such as ammonia and phosphoric acid in the recent months.

"Improving rainfall, brimming dams, favourable raw material prices coupled with recent government initiatives such as increased budgetary allocation for phosphatic and potassic subsidies and desire for Direct Benefit Transfer (DBT 2.0) of fertiliser subsidy are expected to provide the much-needed impetus to the sector," he added.

The manufactured fertilisers business reported revenues of Rs 341 crore in Q1 FY20 as compared to Rs 429 crore in Q1 FY19. Fertilisers trading business was reduced from Rs 151 crore to Rs 55 crore.

The company started commercial production of nitric acid at Dahej in Gujarat and entered into long-term agreements for about 70 per cent of the capacity in April.

It secured funding tie-up of 60 million dollars (about Rs 420 crore) from International Finance Corporation by the way of compulsorily convertible debentures and foreign currency convertible bonds.

DFPC's portfolio spans industrial chemicals, bulk and specialty fertilisers, technical ammonium nitrate and value-added real estate.