The shares of the leading chemical manufacturer fell up to 14 percent after the company’s net profit plummeted by 51 percent YoY and 49 percent QoQ, respectively in Q3FY25.
Price movement
With a market capitalization of Rs 27,457.97 crore, the shares of Deepak Nitrite Ltd were trading at Rs 2013.15 per share, decreasing around 10 percent as compared to the previous closing price of Rs 2,236.80 apiece.
Reason for Fall
The shares of Deepak Nitrite Ltd have seen significant movement after announcing its financial performance in which revenue is decreased by 5 percent on a year-on-year basis from Rs 2,009 crore in Q3FY24 to Rs 1,903 crore in Q3FY25. However, on a Quarter-on-Quarter basis, revenue shrunk by 6 percent from Rs 2,032 crore in Q2FY25 to Rs 1,903 crore in Q3FY25.
Moreover, net profit tumbled by 51 percent on a yearly basis from Rs 202 crore in Q3FY24 to Rs 98 crore in Q3FY25, meanwhile, on a quarter-on-quarter basis, net profit down by 49 percent from Rs 194 crore in Q2FY25 to Rs 98 crore in Q3FY25.
Strategic Initiatives
Deepak Nitrite has plans to enter the Advanced Materials sector with a Rs 5,000 crore investment in polycarbonate resin manufacturing. The project includes greenfield infrastructure, funded via debt and equity. A Technology Licensing Agreement with Trinseo PLC enables a 165,000 MT annual capacity, including proprietary equipment from Stade, Germany.
Also read: Rulka Electricals jumps 4% after receiving orders worth over ₹7 Cr for electrical works
Market insight
India’s polycarbonate resin demand was ~240,000 MTPA in 2023 and is expected to outpace GDP growth. Currently met entirely by imports, this presents a major opportunity for domestic production. Key sectors include mobility, electronics, medical equipment, and packaging, with new EV battery box applications emerging.
Project Updates
The nitric acid project, along with photochlorination, hydrogenation, and nitration block projects, is set for commissioning in H2 FY25. Additionally, the R&D center near Vadodara, enhancing advanced chemistry capabilities, is also on track for commissioning in H2 FY25.
Future Outlook
Management expects demand to rise in H2 FY25 as China’s destocking ends, driven by legacy European customers. The strategy focuses on diversifying customers and expanding distribution to mitigate risks. Agrochemical demand recovery is anticipated from Q3, supporting a positive outlook for CY25.
Company profile
Deepak Nitrite Limited is engaged in the manufacturing and trading of chemicals. The Company
operates through two segments: Advanced Intermediates and Phenolics. It’s Advanced Intermediates segment offers sodium nitrite, sodium nitrate, nitrotoluidines, fuel additives, nitrosyl sulphuric acid, xylidines, etc.
Written by Abhishek Singh
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