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DEEPAK FERTILISERS announces Q4 results

PBT and PAT record substantial growth

Commissions brown field NPK plant during the quarter

Concludes corporate restructuring

Announces 60% Dividend

 

Period

PBT Growth

PAT Growth

Q-o-Q

102%

118%

Y-o-Y

33%

34%

   Deepak Fertilisers and Petrochemicals Corporation Ltd (DFPCL) today announced its financial results for the quarter and year ended March 31, 2017. The company announced a dividend of 60%.

Total income of the Company for the quarter, grew to Rs.1215.39 crores in Q4 FY17 as compared to Rs. 1137.89 crores in Q4 FY16, whereas Profit before Tax witnessed substantial growth from Rs. 32.52 crores in Q4 FY16 to Rs. 65.73 crores in Q4 FY17, an increase of 102%. Correspondingly, Profit After Tax (PAT) also increased from Rs. 23.78 crores in Q4 FY 16 to Rs. 51.85 crores in Q4 FY 17, an increase of 118%.

On an annual basis, total income for the Company dropped marginally to Rs. 4257.25 crores in FY 17 as to compared to Rs. 4468.52 crores in FY 16, whereas Profit Before Tax increased to Rs. 223.29 crores in FY 17 from Rs. 167.51 crores in FY 16, an increase of 33% and Profit After Tax (PAT) increased to Rs. 160.15 crores in FY 17 from Rs. 119.83 crores in FY 16, an increase of 34%.

Acids, in the chemicals segment have maintained consistent performance and have sustained their market share. In solvents, Company continued to maintain its market leadership in Iso Propyl Alcohol (IPA) and trading of solvents registered substantial growth. Lower production of acids and solvents due to water shortage impacted the performance despite favorable demand scenario prevailing in the market. Lower production in Q1 due to water shortage and surge in imports of low priced ammonium nitrate in Q2, impacted the revenues of Technical Ammonium Nitrate (TAN).

Chemical segment revenues for the quarter stood at Rs. 904.58 crores in Q4 FY17 as against Rs. 697.06 crores in Q4 FY16, whereas profit for the chemicals segment stood at Rs. 120.7 crores in Q4 FY17 as against Rs. 76.68 crores in Q4 FY16. Overall the segment reported an improvement in the margins due to efficiency of operations and competitive pricing policy.

On year-on-year basis, chemical segment revenues stood at Rs. 3222.25 crores in FY17 as against Rs. 2969.20 crores in FY16, whereas profit stood at Rs. 497.43 crores in FY17 as against Rs. 344.06 crores in FY16.    

The brown field NPK plant at Taloja was commissioned in Q4 FY17, enhancing the installed capacity from existing 300,000 MTPA to 600,000 MTPA, with a provision to scale it to 1.1 million MTPA. The state-of-the-art INCRO technology plant, can produce multiple grades of complex fertilisers giving the company a distinct advantage to opt for launching several variants, with a provision to customize the products to cater to the requirements of farmers in various types of farming and soil conditions. The Company, in addition to its flagship 24:24:00 grade, has already introduced three new manufactured grades viz: 10:26:26, 12:32:16 and 20:20:00:13. As part of market seeding and development, the Company was earlier importing and trading these grades and has an already established market presence and recall.

While the company remains optimistic with respect to promising outlook of fertilizer demand with favorable forecasts of monsoon, the overhang of channel inventories impacted the off take with reduction in realizations because price cuts etc. 

Total income of the fertilizer segment dropped from Rs 468.96 crores in Q4 FY 16 to Rs 342.26 crores in Q4 FY 17, whereas segment profit stood at Rs. 11.16 crore in Q4 FY 17 as against Rs. 25.91 crores in Q4 FY 16. On year-on-year basis, revenues dropped from Rs. 1658.41 crores in FY 16 to Rs. 1179.87 crores in FY 17, while segment reported a loss of Rs. 8.61 crore in FY 17 as against profit of Rs. 35.33 crores in FY 16. Low volumes of the trading business and price cuts largely impacted the performance of the segment.

Company is gearing up to new regime of Direct Benefit Transfer (DBT) for releasing subsidy and forthcoming switch over to GST.   The Company is also upbeat with respect to emerging growth in the Indian economy and boost to infrastructure augurs well to the prospects of growth in technical ammonium nitrate.   Company is examining options for expanding the size and scale to maintain its market leadership and seize the growth opportunities across its product offerings.

Mr. Sailesh C. Mehta, Chairman & Managing Director – DFPCL, said: “FY17 carries special significance on account of commissioning of state-of-the-art NPK plant which carries potential to produce multiple grades of complex fertilisers and allows the company to specifically cater to hitherto unmet need of the farmers by supplying crop specific requirement of soil nutrition.  Market has responded overwhelmingly to the quality and new packaging of the newly produced NPK.   In our endeavor to sharpen strategic focus of each of the business verticals and enhance shareholders’ value, the company undertook demerger of two of its inter-linked business verticals viz fertilisers and technical ammonium nitrate to its wholly owned subsidiary M/s Smartchem Technologies Limited.  The Scheme of Restructuring has since been approved by NCLT and duly effected w.e.f. 1st May, 2017 by filing the NCLT approval with Registrar of Companies. 

We are now bringing our focus in transforming the business positioning from commodity offering to providing value solutions to customers.  We have been assisted by a globally renowned firm of management consulting, accredited with transforming business models of several domestic and international companies. 

As part of our growth plans, we are actively pursuing opportunities for raw material securitization and opportunities to scale up capacities of existing products. With good monsoon predictions, favorable global commodity prices and rapidly increasing coal production, the Company is poised towards steady growth in the forthcoming quarters.”

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