Deepak Nitrite slips after closure of Hyderabad unit

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Deepak Nitrite fell 2.62% to Rs 122.85 at 10:47 IST on BSE after the company said it has received an order from the Telangana State Pollution Control Board for closure of one of its three units situated at Hyderabad.

The announcement was made after market hours yesterday, 6 October 2016.

Meanwhile, the BSE Sensex was down 31.58 points, or 0.11%, to 28,074.63.

On BSE, so far 40,000 shares were traded in the counter, compared with average daily volume of 94,146 shares in the past one quarter. The stock hit a high of Rs 125.95 and a low of Rs 120.60 so far during the day. The stock hit a record high of Rs 134.25 on 9 September 2016. The stock hit a 52-week low of Rs 56.10 on 12 February 2016. The stock had underperformed the market over the past 30 days till 6 October 2016, rising 1.77% compared with 2.84% decline in the Sensex. The scrip had, however, outperformed the market in past one quarter, rising 37.87% as against Sensex's 3.61% rise.

The small-cap chemicals maker has equity capital of Rs 23.26 crore. Face value per share is Rs 2.

Deepak Nitrite makes diamino stilbene disulfonic acid (DASDA) at its facility at Hyderabad and the unit for which order has been received, is a processing unit. The company's DASDA production will be affected due to the said order.

The company said it is taking all the necessary effective steps to correct the anomalies pointed out by the authorities in the manufacturing system. Efforts are being put to get the closure notice revoked within a week or so. There will not be any major impact on service to DASDA customers. The week long interruption in production shall not have any major impact on the optical brightening agents production also, as adequate inventories are available, the company added.

Net profit of Deepak Nitrite rose 407.93% to Rs 67.86 crore on 7.80% decline in net sales to Rs 310.13 crore in Q1 June 2016 over Q1 June 2015.

Deepak Nitrite is a multi-division and multi-product company with manufacturing facilities at Nandesari and Dahej in Gujarat, Roha and Taloja in Maharashtra and at Hyderabad in Andhra Pradesh. The company's portfolio is a wide spectrum of products with diverse applications ranging from agrochemicals, rubber, pharmaceuticals, paper, textile, detergent, colourants, petrochemicals to speciality and fine chemicals.

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