Deepak Nitrite Ltd. reported drop in its first quarter earnings and profit due to weak market demand caused by Covid-19 pandemic.

Consolidated net revenue dropped by 35.82% yoy and stood at stood at Rs 674.49 crore in the first quarter as against Rs 1,050.98 crore in the same quarter last year.

EBITDA stood at Rs 181.63 crore in Q1FY21 that decreased by 28.44% yoy. For Q1FY20, it had posted EBITDA of Rs 253.82 crore.

The consolidated net profit in Q1FY21 stood at Rs 98.95 crore that declined by 24.82% yoy, as compared to Q1FY20, when it had reported Rs 131.61 crore. The net profit margin in Q1FY21 came in at 14.67% that increased by 2.15% yoy. The net profit margin for Q1FY20 was at 12.52%.

The company's revenues declined sharply in basic chemicals and performance products segment followed by phenolics division. While fine and specialty chemicals was the only division which showed growth during the quarter.

Domestic revenues stood at Rs. 157 crore in Q1 FY21 as against Rs. 320 crore in the corresponding period last year. This was partly because the company was constrained in its production, and partly because management chose to take advantage of a depreciated currency and increase export bias.

Export revenues were Rs. 186 crore in Q1 FY21 compared to Rs. 227 crore in Q1 FY20, reporting de-growth of 18% Y-o-Y. The focus was higher on exporting to countries that were on the path to recovery from the effects of the virus: Asia and Europe.

Further the company's wholly-owned subsidiary Deepak Phenotics Limited will be expanding its capacity of production of Isopropyl Alcohol (IPA) at its manufacturing facility situated at Dahej, Gujarat from 30,000 Tonnes Per Annum (TPA) to 60,000 TPA.

Commenting on the performance, Deepak C. Mehta, Chairman & Managing Director, said, “Entering the financial year, we knew that this quarter would need a substantial pivot from financial performance to caretaking. Your company’s highest duty is to the 2500 families that depend on it for their livelihood and the countless that live and work around it for their safety.

We were faced with multiple challenges including petrochemical volatility, COVID-19 lockdowns, manpower constraints, Cyclone Nisarg over the quarter. In spite of that, I’m happy to note that, we continue to adhere to the 3Ps of growth.

I am also proud of DPL’s technical team that self-commissioned the IPA plant in April without support from the foreign technology provider to support the nation in its time of need. The plant is already operating at 110% capacity and will soon be expanded. DNL’s brownfield expansions will be commissioned in the 3rd and 4th quarters, and development activity for a range of value added products is taking shape at the newly acquired Dahej site.”