Deepak Nitrite slumps after weak Q1 show

Deepak Nitrite tumbled 7.4% to Rs 595.40 after the chemical maker posted a 24.8% drop in consolidated net profit to Rs 98.95 crore in Q1 June 2020 from Rs 131.61 crore in Q1 June 2019.

Consolidated net sales stood at Rs 674.49 crore in Q1 June 2020, falling 36% from Rs 1050.98 crore in Q1 June 2019. The result was announced after market hours yesterday, 6 August 2020.

Profit before tax came at Rs 132.64 crore in Q1 June 2020, falling 34% from Rs 201.23 crore in Q1 June 2019. Total tax expense for Q1 June 2020 stood at Rs 33.69 crore, declining 51% from the year ago period.

Meanwhile, Deepak Phenolics, a wholly-owned subsidiary, is expanding its capacity of production of lsopropyl Alcohol (lPA) at its manufacturing facility situated at Dahej, Gujarat from 30,000 Tonnes Per Annum (TPA) to 60,000 TPA. The company said that the existing capacity utilization for manufacturing IPA is above 100%. IPA is a solvent and majorly used by pharma companies and is also used in manufacture sanitizer.

The company said it expected to commission the capacity expansion in the first quarter of financial year 2021-22 for an approximate cost of Rs 50 crore. The demand of IPA in India is around 1,80,000 TPA. While domestic manufacturing capacity is around 100,000 TPA with 80,000 TPA being imported. The capacity addition will also help in further reducing dependence on imports of IPA.

Deepak Nitrite makes chemical intermediates. It has a diversified portfolio of intermediates that cater to the dyes and pigments, agrochemical, pharmaceutical, plastics, textiles, paper and home and personal care segments in India and overseas.

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