Deepak Fertilisers and Petrochemicals Corporation Ltd (DFPCL) has posted a net profit of Rs 23.47 crore during Q3 FY 16 versus Rs 1.25 crore in Q3 15. The 17 times growth in PAT is mainly due to growth in volumes and efficiency in the margin of acids and TAN business as well as higher trading in the fertiliser segment.
The total income of the company in the two quarters being compared stood at Rs 1,051.32 crore from Rs 818.48 crore respectively, translating into a rise of 28 per cent.
While the chemicals segment registered a marginal growth in revenues at Rs 722.20 crore in Q3 FY 16 from Rs 627.87crore in Q3 FY15, the acids business and Technical Ammonium Nitrate (TAN) recorded a significant growth in volume as compared to the previous year same quarter. Moreover, a fall in global ammonia prices led to better margin realisation.
Profit from the chemicals segment stood at Rs 93.58 crore in the quarter under review versus Rs 44.65 crore in Q3 FY 15. While the overall performance of the sector was good, the economic crisis in China, the fall in global commodity prices, and forex volatility led to lower margins in IPA as well as other traded chemicals, impacting the company’s sectoral profitability, DFPCL said in a filing to the BSE.
As compared to the same period last year when due to unavailability of domestic gas the company could not manufacture its flagship product Mahadhan Mahapower, thanks to the company switching to LNG to produce it, substantial growth in manufactured fertilisers was seen on account of demand from farmers.
Revenues for the quarter stood at Rs 408. 84 crore in Q3 FY16 compared to Rs 192.36 crore in Q3FY15. However, the segment recorded a loss at Rs 1.26 crore during the quarter under review as against a loss of Rs 5 crore in Q3 FY 15 due to higher cost of manufacturing using LNG.
Domestic gas supply to the company was stopped effective May 15, 2014, pursuant to an order of the Ministry of Petroleum and Natural Gas (MoPNG). Despite two High Court orders directing the government to resume gas supply, the supply is yet to be resumed. Further legal measures are being pursued.
Sailesh C. Mehta, CMD, DFPCL, said, “As compared to the previous few quarters, performance in this quarter has shown some positive signals. This quarter witnessed acids and TAN recording good volumes and the company will now take on the next growth phase with expectations of better performance and enhanced market leadership. We continue to remain optimistic about the resumption of natural gas supply and are hopeful that the matter will soon be resolved.”
On the BSE, the Deepak Fertilisers stock closed with a gain of over 5 per cent while the benchmark index was down by 0.4 per cent.