Deepak Nitrite shares drop 8% as Q3 results miss estimates; profit down 52%

Deepak Nitrite results: For the quarter ended December 31, 2024 (Q3 FY25), Deepak Nitrite reported a net profit of Rs 98 crore. This was 51.5 per cent lower than last year's profit of Rs 202 crore

Deepak Nitrite share price dropped in a firm stock market session today amid weak December quarter results. On the BSE, Deepak Nitrite shares plunged 8.4 per cent to Rs 2,047.6 per share on Friday, February 14, 2025. On the NSE, Deepak Nitrite share price hit a low of Rs 2,046.

 

By comparison, the Sensex index was up 205 points (0.11 per cent) at 76,344 at 9:25 AM.

 

For the quarter ended December 31, 2024 (Q3 FY25), Deepak Nitrite reported a net profit of Rs 98 crore. This was 51.5 per cent lower than last year’s profit of Rs 202 crore.

 

 

The chemical company’s revenue fell 5.3 per cent year-on-year (Y-o-Y) to Rs 1,903.4 crore, while its earnings before interest, tax, depreciation, and amortization (Ebitda) tumbled around 45 per cent to Rs 168.5 crore.

 

Operating margins of the company fell to 8.9 per cent for Q3 as against 15.2 per cent in Q3FY24.

 

The management said the operating performance of the company in the quarter was “aberrant” due to a “perfect storm” of plants being idled because of deferred demand, lag adjusted recovery in agrochemical intermediates, and elevated raw material prices, and oversupply from China.

 

“Margins contracted because of a transient feedstock price increase. There is an expectation of margin expansion in this quarter,” it said in its financial statement.

 

Analysts at Nuvama Institutional Equities had expected Deepak Nitrite to report weak earnings during the quarter owing to weak phenol/acetone spreads.

 

“The Advanced intermediates portfolio, too, looks challenged owing to global inventory realization, especially in the agrochemical intermediates segment,” it has said in its Q3 results preview report.

 

Yet, the chemical company’s Q3 results are weaker-than-expectations.

 

The brokerage expected Deepak Nitrite to report a net profit of Rs 178 crore for the December 2024 quarter, with revenue at Rs 2,004.4 crore.

 

It also expected a 2-per cent improvement in phenolics business, whereas Advanced Intermediates were estimated to fall 5 per cent Q-o-Q.

 

Those at Elara Capital, too, expected Deepak Nitrite to report net profit of Rs 159.5 crore, revenue of Rs 1,991.4 crore, and Ebitda of Rs 247.4 crore.

 

Deepak Nitrite is a chemical intermediates company in India with a diversified portfolio of products that caters to multiple industries with varied applications. Deepak Nitrite has leveraged process expertise, technological prowess, and operational excellence to capitalise on opportunities for growth and deliver sustained value creation for stakeholders.

 

According to the company’s statement, Intermediates like DASDA continue to be imported at unreasonable prices and the government has initiated an investigation of dumping. Besides, the company’s agrochemicals plants were idled as customers prioritised inventory destocking.

 

However, the company noted that it is seeing volume pickup from international customers beginning this quarter (Q4FY25), even as it expects domestic customers to start lifting by the end of the quarter.

 

“We expect demand patterns to normalise thereafter. On Performance Products, the outlook remains unchanged,” the management said.

 

Going ahead, Deepak Nitrite said it has taken several measures to ensure that productivity and profitability are meaningfully improved ahead as the company has commissioned four new products during Q3 and in the quarter with orders in hand.

 

It believes cost improvement initiatives and debottlenecking activities will further improve performance. Additionally, commissioning of large projects during H1FY26 makes them cautiously optimistic on the outlook ahead with profitability likely returning to normalised levels.