Operational Highlights
- During Q3FY20 the topline jumped by 35%.
- Revenue from operations stood at ₹1956 Cr from ₹1447 Cr in Q3FY21
- EBITDA improved by 62% to ₹352 Cr from ₹217 Cr in Q3FY21
- Finance Cost reduced by 15.4% YoY primarily driven by better working capital management
- Reduced net debt by roughly ₹240Cr
Segment overview
Chemicals
- Chemical business contributed 60% of revenues
- IPA and NA (pharma/speciality) together contributed 20% to revenues
- Production at Dahej WNA Plant suffered due to technical issues which have been resolved and normal operations resumed in Dec 2021.
- Despite significant increase in Ammonia Prices, Nitric Acid demonstrated improvement in both volumes(6%) and margins backed by the improved demand from the downstream industry
- Tsunami in raw material price hike as ammonia jumped up by 115% RGP by 76% followed by potash and coal on YoY basis. These challenges were overcome by customer resilience to pass through the prices
- Despite adverse impact of increasing Ammonia and Commodity costs, margins in all product segment (i.e. HDAN, AN Melt and LDAN) improved as supported by robust demand.
- Capacity utilisation for TAN is 100% for Q3 and 9M FY22
- TAN (mining chemicals) together contributed 20% to revenue
Fertiliser
- 40% was contributed from fertiliser business
- Volumes in NPK were lower
- Early onset of winter & higher required moisture following a delayed withdrawal of monsoon made favourable condition for Rabi Sowing
- Fertiliser segment profitability was impacted due to unfavourable movement of key RM Prices Yo-Y (Ammonia▲ ~115%; Phos Acid ▲ ~78.5%)
- Capacity utilisation NP/NPK 47%; Bensulf 36%
Strategy
- Focus on more specialty and customer centric products and move up the value chain
- Raw material used for IPA is propylene whereas deepak nitrite manufactures IPA from acetone.
- Last year IPA performed significantly last year compared to this year because prices are subdued in FY22 resulting pressure on margins
- Using the IPA in end user segment where the margins are better
- Evaluating on expansion for acetone based IPA
- TAN has applications in all the mineral mining activities as the explosive solutions but mostly 55-60% is used in coal mining
- 2-2.5 lakh tons increase in demand for TAN annually
- Minings activities are subdued in 2nd quarter, Q3 and Q4 are quarters where TAN demand is higher
- Significant flooding in coal india mines which resulted in beginning production from december, under favourable conditions the mining begins from october
- New capex(ammonium nitrate) at taloja will be zero liquid discharge plant
- The regulations doesn’t mandate, however efforts are being taken to reduce Nox emission thus controlling the air pollution
- 3 main objectives- timely execution of capes, product diversity and technology enhancement
- Currently working on debottlenecking of TAN plant
- Strong market for products in maharashtra Gujarat and karnataka and expanding to other geographies