PremiumDeepak Fertilisers & Petrochemicals Corporation has more than doubled investors' wealth so far in the current year. More upside in the stock can be expected as the company recorded strong growth in September 2022 quarterly earnings. In Q2FY23, Deepak Fertilizers posted a nearly 3-fold jump in its net profit to ₹276 crore compared to a PAT of merely ₹93 crore witnessed in Q2 of the previous fiscal. Deepak Fertilisers half yearly bottom-line has crossed full-year FY22 profitability. Its chemical segment witnessed strong growth. EBITDA and margins also accelerated, while revenue further came in strong during the quarter.
The company recorded double-digit growth in the top-line front. Its operating revenue came in at ₹2,719 crore in Q2FY23 up by 51.7% from ₹1,793 crore a year ago same quarter.
Operating EBITDA stood at ₹495 crore in Q2FY23 -- increasing by a whopping 133.3% from ₹212 crore in the same quarter last year. Margins improved by 480 basis points to 10% in Q2FY23 versus 5.2% in Q2FY22.
For the first half of FY23, the company's PAT soared by a breath-taking 217.6% to ₹711 crore compared to ₹224 crore in H1FY22. Revenue climbed by 55.6% yoy to ₹5,750 crore in H1FY23. While EBITDA surged by 145.9% yoy to ₹1,235 crore, margins came in at 12.3% expanding by 625 basis points year-on-year.
In its release, Deepak Fertilisers said, "Best Q2 and H1 Financial Performance with high growth trajectory in place."
As per the regulatory filing, the company's chemicals segment contributed ~86% of total segment profits in H1FY23. Chemicals Revenues grew by 74% yoy and margins expanded from 17% (H1 FY22) to 35% (H1 FY23). Meanwhile, fertilizers segment revenues grew by 36% yoy in H1FY23 with segment margins of 8%, as the cost of production inevitably grew due to the sharp rise in the price of raw materials.
Sailesh C. Mehta, Chairman & Managing Director said, "We are happy to share that the Q2 and H1 results have validated: a) Despite huge RM prices hikes, our pass-through remains healthy; b) Our strong alignment with India growth story provides positive tailwinds to demand growth for our products; c) Our drive from Commodity to Speciality continues to support premium margins and brand consolidation in the mining chemicals, pharma chemicals, and crop nutrition businesses."
Deepak Fertilisers stated that ADB grants $30 million in debt assistance and a $0.5 million technical grant for Farm Efficiency initiatives. Under this, the first tranche of disbursement of $15 million has been completed.
"The unique ADB association has been a very satisfying acknowledgment of the efforts and impact we have been making with providing speciality and crop-specific performance fertilisers and our intense work at the farmer level," Mehta added.
He said further, "our drive for fast-track project execution for the Ammonia and TAN projects continues full swing."
On Thursday, Deepak Fertilisers stock ended on a lower note at ₹885.20 apiece down by 3.34%. Its market cap is around ₹11,174.57 crore. However, the latest price level is still far better than compared to the start of January this year.
So far in 2022, Deepak Fertilisers stock has gained by at least 119.9%. The stock was around ₹402.55 apiece on BSE on January 3, 2022. Let's suppose, an investor invested ₹1 lakh in Deepak Fertilisers on January 3, their corpus has now more than doubled.
Deepak Fertilisers had clocked a 52-week low of ₹344 apiece on November 23, 2021. The stock has gained by a huge over 157% on BSE from its 1-year low. In a year, the stock's upside is more than 122% from November 10, 2021, to date.
The stock has touched a 52-week high of ₹1,061.70 apiece last month on BSE.
Deepak Fertilisers is a small-cap stock.
Deepak Fertilisers and Petrochemicals Corp is among the India’s leading manufacturers of industrial chemicals and fertilisers. With a strong presence in Technical Ammonium Nitrate (mining chemicals), Industrial Chemicals and Crop Nutrition (fertilisers), the Company supports critical sectors of the economy such as infrastructure, mining, chemicals, pharmaceutical and agriculture.