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Yahoo
26-05-2025
- Business
- Yahoo
Deepak Fertilisers & Petrochemicals Corp Ltd (BOM:500645) Q4 2025 Earnings Call Highlights: ...
Release Date: May 23, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Deepak Fertilisers & Petrochemicals Corp Ltd (BOM:500645) reported a 28% increase in Q4 top line and a 21% increase in bottom line, with the full year top line growing by 18% and bottom line doubling by 102%. The company's strategic focus on moving from commodity to specialty products is gaining traction, with specialty products now contributing 22% of total revenue. The crop nutrition business has shown significant growth, with crop-specific fertilizers and specialty fertilizers like water-soluble fertilizers contributing to increased sales and customer retention. The company has successfully reduced net debt by 120 crores, improving the net debt-to-EBITDA ratio to 1.72 from 2.66, and has infused 800 crores into its subsidiary, Deepak Mining Solutions. Deepak Fertilisers & Petrochemicals Corp Ltd (BOM:500645) is well-positioned to benefit from the India growth story, with projects aligned to infrastructure and mining sectors, and plans to enhance capacities in nitric acid and technical ammonium nitrate. The company's industrial chemicals segment faced challenges due to an IPA plant shutdown, impacting profitability. There is a perplexity regarding the valuation of the company's mining business compared to the overall company valuation, indicating potential undervaluation of other segments. The company faces capacity constraints in nitric acid production, limiting growth in the technical ammonium nitrate segment. Despite strong financial performance, the company is still below its 2022-2023 turnover and bottom line figures, indicating room for improvement. The company anticipates peak debt levels to reach around 5,000 crores due to ongoing CapEx projects, which could impact financial flexibility in the short term. Warning! GuruFocus has detected 5 Warning Sign with BOM:500645. Q: What is the current ammonia pricing and what was the annual savings in FY25 from the ammonia plant? A: The current price of ammonia is around $330. The savings are not specified separately for ammonia as we have an integrated supply chain. Our EBITDA break-even is around $310 to $320. Q: What would be the peak debt levels over the next two years considering the upcoming CapEx? A: We are nearing the end of our current CapEx cycle. The debt level is currently around 3,300 crore and we expect it to peak at around 5,000 crore. By FY26, the peak debt could be 5,000 crore, after which we expect deleveraging as new facilities start contributing to cash flow. Q: Why have other expenses increased, and why is the chemical business segment earnings down in Q4? A: The increase in other expenses is primarily due to the growth in the CNB business, which has high freight costs. The chemical business segment earnings are down due to an IPA shutdown, impacting profitability. Q: What are the expected incremental ROC and utilization levels for the new nitric acid and downstream projects? A: We expect a healthy ROC of 18-20% for the new projects. Utilization is expected to be 70% in the first year, reaching 80-85% for optimal ROC. Q: How do you view the competition and demand for ammonium nitrate given new entrants in the market? A: The current demand for ammonium nitrate is around 1.4 million tons, with existing capacity at 1 million tons, indicating a supply gap. The demand is growing at 6-7% annually, providing room for new players. We have unique advantages such as strategic location and experience, which will help us maintain our market position. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
22-05-2025
- Business
- Reuters
India's Deepak Fertilisers posts quarterly profit rise on robust demand
May 22 (Reuters) - India's Deepak Fertilisers and Petrochemicals ( opens new tab posted a 23.2% rise in quarterly profit on Thursday, supported by strong demand for its crop nutrition products. The company's consolidated net profit rose to 2.77 billion rupees ($32.2 million) in the fourth quarter, from 2.25 billion rupees a year earlier. Fertilisers and chemicals each contribute nearly half of the company's revenue, which rose 27.9% in the quarter to 26.67 billion rupees. Revenue from the fertilisers business rose nearly 89%, while that from chemicals declined 4.9%. For further earnings highlights, click [here] KEY CONTEXT Analysts said fertilisers companies such as Deepak Fertilisers outperformed their agrochemical peers in the fourth quarter, as volume growth, price hikes and demand for complex fertilisers lifted profitability. Unlike agrochemical firms, which continue to face demand volatility in both domestic and export markets, fertilizers are showing resilience in demand. PEER COMPARISON * The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell ** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT JANUARY-MARCH STOCK PERFORMANCE -- All data from LSEG IBES -- $1 = 86.0225 Indian rupees
