Deepak Nitrite (DEEPAKNTR) Q4 03/04 earnings summary

Executive summary

• FY 2003-04 turnover rose 12%; export turnover reached Rs 112 crore, up 44%, while higher input costs and weaker Nitro Chloro Benzene (NCB) pricing pressured margins.

• Profit after tax fell to Rs 8,12,98,209 from Rs 11,70,73,905; the Aryan Pesticides merger took effect on 31 March 2004, making year-on-year figures non-comparable.

Financial highlights

• Sales net of excise and other income totaled Rs 290,31,87,276, versus Rs 254,16,31,445; gross profit before interest, depreciation and tax was Rs 33,64,84,366, versus Rs 32,56,23,879.

• Profit before tax was Rs 9,37,98,929 versus Rs 14,72,98,916; profit after tax was Rs 8,12,98,209 versus Rs 11,70,73,905.

• Export turnover crossed Rs 100 crore to Rs 112 crore, up 44% YoY; FOB export value was Rs 105,09,50,078 versus Rs 74,18,38,019.

• Other income included Rs 3,73,64,020 profit on sale of investments and Rs 95.94 lacs net foreign-exchange variation gain.

Outlook and guidance

• Rationalising and consolidating nitration-based capabilities across multiple sites, with long-term supply contracts secured from major international users.

• Long-term contracts are expected to reduce exposure to adverse NCB market conditions; the Aryan Pesticides merger creates opportunities in fine and speciality chemicals.

• R&D focus on value-added fine and speciality chemicals, process improvements, and products for agro and imaging chemicals.