Deepak Nitrite Q2 results: Profit more than triples to Rs 398 crore, shares jump 9%

Deepak Nitrite Q2 results showed a sharp turnaround in profitability. The chemicals maker reported net profit of Rs 398 crore for the September quarter of FY27, more than three times the Rs 118.7 crore it earned a year earlier. Revenue rose 61.7% year-on-year to Rs 3,076 crore from Rs 1,901.9 crore.

The market welcomed the numbers. Deepak Nitrite shares rose as much as 9% on Friday, October 30, the day after the results. The stock opened at Rs 1,580 on the NSE, against the previous close of Rs 1,476, and touched an intraday high of Rs 1,615.

Margins expand sharply

Operating performance improved even faster than sales. EBITDA (earnings before interest, tax, depreciation and amortisation) climbed to Rs 627 crore from Rs 204.3 crore a year ago. The EBITDA margin nearly doubled to 20.4% from 10.7%.

Brokerage Motilal Oswal noted that revenue of about Rs 3,080 crore was well ahead of its estimate of Rs 2,140 crore. By its numbers, revenue grew 62% year-on-year and 19% from the previous quarter, while gross margin widened by 730 basis points year-on-year to 34.8%, though it slipped 200 basis points from the June quarter.

Key numbers

• Net profit: Rs 398 crore (vs Rs 118.7 crore a year ago)
• Revenue: Rs 3,076 crore (+61.7% YoY)
• EBITDA: Rs 627 crore; margin 20.4% (vs 10.7%)
• Share price: opened at Rs 1,580, intraday high Rs 1,615

New plant and longer-term stock performance

Separately, the company said its wholly owned subsidiary Deepak Chem Tech Ltd began manufacturing on September 29 at its chlorination and specialty chemicals plant in Dahej, Bharuch, Gujarat. About Rs 300 crore of capital expenditure had been spent on the project by then.

Even after the latest rally, the stock’s longer record is weak. It was up 4.93% over the past week but down 0.76% over a month, 10.77% lower year-to-date and 12.75% lower over one year. Over three and five years, it has fallen 23.75% and 31.93% respectively.