Deepak Nitrite posts strong operational performance in Q3
Deepak Nitrite shares rallied 12% day on Monday and scaled a new high of Rs 1,240 on the BSE after the chemical intermediates company delivered a strong operational performance with consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) growing 25% year on year (YoY) at Rs 340 crore in the December quarter. Revenues grew 9% to Rs 1,240 crore in Q3FY21, led by robust YoY improvement in the phenolics business aided by incremental contribution from IPA products. The profit after tax (PAT) was higher by 38% YoY at Rs 217 crore. The operational improvement in the phenolics business and contribution from IPA supported by better logistics and sourcing have been accompanied by lower finance costs and depreciation, which has led to the sharp rise in quarterly PAT.
In the backdrop of volatile input prices and persistent sluggishness in some end-use industries like oil, paper, textile Deepak Nitrite achieved a strong sequential recovery in both revenues and profitability, and it expect the trend to continue in January-March quarter (Q4FY21).
The company is setting the platform for continued growth through planned introductions of newer products and projects. It is witnessing encouraging demand scenario across several end user industries, and that is expected to continue as it moves ahead. Second phase of the IPA plant is progressing well and remains on track to be commissioned in the fourth quarter. Brownfield expansions at Nadesari plant along with other downstream products in the phenolics business also contribute to the strong outlook.
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