Deepak Fertilisers Q3 profit surges to Rs 46.62 crore

MUMBAI: Deepak Fertilisers and Petrochemicals Corporation (DFPCL) today reported over two fold increase in profit after tax (PAT) at Rs 46.62 crore in the third quarter ending December 31, 2016, buoyed by conducive market conditions and good market realisation.

The company's PAT in Q3 FY16 was registered at Rs 22.74 crore, DFPCL said in a release issued here.

Overall sales of DFPCL marginally dropped to Rs 1,058.78 crore in Q3 FY17 as against Rs 1,108.04 crore in the same period last year.

Favourable market conditions, competitive raw material prices and good market realisation contributed towards a better performance by the chemical segment, DFPCL said.

Further, it said that trading business in this segment displayed a steep jump and registered revenue increase of 77 per cent against same quarter of previous year.

However, volumes of Technical Ammonium Nitrate (TAN) were impacted due to balance inventory of cheap imports, though overall the segment saw an improvement in margins due to operational efficiency and competitive raw material prices.

The overhang of discounts on the channel inventory, present prevailing uncertainty in the agricultural sector and low purchasing power of the farmers due to demonetisation during the rabi sowing period, impacted the performance of the segment during the quarter.

Moreover, considering the huge inventories available in the channel, the company restricted volumes of the trading business, hence, the overall performance of the fertiliser segment was subdued during the quarter.

The company revealed that its new NPK plant is ready for commercial production after successful trials and is geared up to provide high quality fertilisers during the coming kharif season.

"Trials have been successful and we are geared up to launch the commercial production of the new NPK grades soon. Basket offering of products, penetration into newer markets and enhanced availability of NPK will help generate higher sales and improve the performance of the segment. Industrial chemicals continue to perform well and we are hopeful of growth in all our segments," DFPCL Chairman and Managing Director Sailesh C Mehta said.