What Caused Deepak Nitrite's Q1 Profit to Plummet by 45%?
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Synopsis
Deepak Nitrite Limited has reported a staggering 44.6% decline in net profit for Q1 FY26, raising concerns about the chemical intermediary sector's performance. With revenue dropping 12.8%, the company faces significant challenges. This article delves into the factors behind these results and the implications for the industry.
Key Takeaways
- Net profit declined by 44.6% YoY to Rs 112 crore.
- Revenue decreased by 12.8% YoY to Rs 1,889.8 crore.
- Total expenses for the quarter reached Rs 1,759.7 crore.
- EBITDA fell by 38.8% YoY to Rs 189.3 crore.
- EBITDA margin shrank to 10% from 14.3%.
Mumbai, Aug 13 (NationPress) Chemical intermediary producer Deepak Nitrite Limited disclosed a significant decline in its earnings for the first quarter of the financial year concluding on June 30 (Q1 FY26) on Wednesday.
The chemical firm’s net profit plummeted by 44.6 percent year-on-year (YoY) to Rs 112 crore, down from Rs 202.5 crore during the same period last fiscal year (Q1 FY25), according to its filing with the stock exchange.
Moreover, the company's revenue experienced a decrease, falling 12.8 percent to Rs 1,889.8 crore from Rs 2,166.8 crore in the same quarter of the previous year.
Total expenses for the reported quarter amounted to Rs 1,759.7 crore, compared to Rs 1,910.85 crore in the prior year.
The primary contributors to the company’s expenses included the cost of materials consumed at Rs 1,331.09 crore, other expenses at Rs 119.5 crore, power and fuel costs at Rs 113.66 crore, and employee benefits at Rs 106.45 crore.
Operating performance also suffered, with EBITDA declining 38.8 percent to Rs 189.3 crore from Rs 309.4 crore in the preceding financial year.
The EBITDA margin shrank to 10 percent from 14.3 percent in the same quarter of the prior fiscal.
These results were revealed post-market hours on Wednesday. Earlier that day, shares of Deepak Nitrite closed at Rs 1,873.50 each on the Bombay Stock Exchange (BSE), an increase of Rs 10.20 or 0.55 percent.
Headquartered in Vadodara, Gujarat, Deepak Nitrite is a prominent Indian chemical intermediary manufacturer offering a diverse range of products, including basic chemicals, fine and specialty chemicals, and performance products.
The company operates manufacturing facilities in Gujarat, Maharashtra, and Telangana, serving both domestic and international markets.
Its wholly-owned subsidiary, Deepak Phenolics Limited, concentrates on producing phenol and acetone.
Deepak Nitrite’s products cater to various industries, including agrochemicals, pharmaceuticals, rubber, paper, and detergents.
The firm is recognized for its "Responsible Chemistry" philosophy, sustainable manufacturing practices, and expanding global presence, exporting to nearly 30 countries across six continents.
Point of View
It is crucial to recognize the broader implications of Deepak Nitrite's financial downturn. This situation reflects not only the challenges faced by the company but also signals potential shifts within the chemical manufacturing industry in India. Stakeholders must closely monitor these developments to navigate the evolving landscape effectively.
NationPress
05/10/2025
Frequently Asked Questions
What were the profit figures for Deepak Nitrite in Q1 FY26?
Deepak Nitrite reported a net profit of Rs 112 crore for Q1 FY26, which is a 44.6% decline compared to Rs 202.5 crore in Q1 FY25.
How did Deepak Nitrite's revenue change in Q1 FY26?
The company's revenue fell by 12.8%, dropping to Rs 1,889.8 crore from Rs 2,166.8 crore in the same quarter last year.
What contributed to the expenses of Deepak Nitrite in Q1 FY26?
The major expenses included the cost of materials consumed, power and fuel, and employee benefits, totaling Rs 1,759.7 crore.
What is the EBITDA margin for Deepak Nitrite in Q1 FY26?
The EBITDA margin decreased to 10% from 14.3% in the same quarter of the previous fiscal year.
Where is Deepak Nitrite headquartered?
Deepak Nitrite is headquartered in Vadodara, Gujarat, India.
