Deepak Nitrite Ltd

Meeting Details

Plant commissioning

• Wholly owned Deepak Chem Tech commissioned chlorination and specialty chemicals plant at Dahej on 29 Sept 2026.
• Total capex incurred for the project is approximately ₹300 crores as of commencement of manufacturing operations.
• Plant is located at Dahej, Bharuch district, Gujarat.

OCRPS issuance to DPL

• DCTL issued 80,00,000 OCRPS at ₹100 each, totaling ₹80 crore to DPL.
• OCRPS are 9% redeemable, optional convertible, issued to DPL from DCTL.
• DPL is wholly owned; DCTL is also wholly owned by Deepak Nitrite; related-party infusion.
• Purpose to strengthen DCTL capital base and fund project expenses.
• Cash consideration via normal banking channels; cost at par.
• No governmental or regulatory approvals required for the investment.
• Post-transaction, Deepak Nitrite retains 100% DCTL equity and indirect 100% pref cap.
• DCTL turnover FY2025-26 ₹172.23 crore.
• Allotment date: 29 September 2026.

Transaction details

• DCTL issued 95,00,000 OCRPS at ₹100 each to Deepak Phenolics Limited (DPL).
• DCTL issued 80,00,000 OCRPS at ₹100 each to Deepak Nitrite Limited (DNL).
• Total OCRPS value ₹175 crore; 9% coupon; allotment dated 26 August 2026.
• OCRPS are related party transactions on arms-length basis between wholly owned subsidiaries.

Ownership & related party

• DNL retains 100% equity; DPL holds indirect 100% of DCTL's preference capital.
• No external regulatory approvals required for the investment.

Strategic and financial context

• Purpose: strengthen DCTL's capital base and fund project expenses and general corporate needs.
• DCTL FY2025-26 turnover ₹172.23 crore.

Regulatory settlement

• Settlement Officer for factories Ahmedabad passed a settlement order against Deepak Chem Tech Limited.
• Order requires payment of Rs 3,00,000 under Occupational Safety, Health and Working Condition Code, 2020.
• Violation attributed to Rule 102 of Gujarat Factories Rules, 1963; payment made on 25 August 2026.
• No material financial impact beyond the settlement amount.
• DCTL is a wholly owned subsidiary of Deepak Nitrite Ltd.

Resignation of SBU Head – Life Sciences

• Puneet Sharma resigns from SBU Head – Life Sciences.
• Effective close of business hours on 21 August 2026.
• Reason: to pursue an opportunity outside the organisation.
• Contractual notice period of three months; last working day 21 August 2026.

Financial Performance

• Revenue from operations rose to INR 2,592 crore, up 35% YoY and 22% sequential.
• EBITDA at INR 554 crore, up 159% YoY and 45% QoQ; margin 21%.
• PBT reached INR 468 crore, up 202% YoY and 55% QoQ.
• PAT stood at INR 345 crore, up 207% YoY and 57% QoQ.
• Management called the quarter the highest ever revenue, EBITDA, PBT and PAT.

Segment Update

• Phenolics revenue INR 1,775 crore; up 36% YoY, 24% QoQ; EBIT INR 418 crore, margin 24%.
• AI revenue INR 804 crore; up 33% YoY, 14% QoQ; EBIT INR 67 crore, margin 8%.
• Phenolics is largely domestic; AI exports 40–50%; overall 80% domestic, 20% exports.
• Ammonia-to-amines integration completed; strengthens supply security and downstream opportunities.
• MIBK and MIBC to be commissioned in August; acetophenone with them; rest in Q2.
• Polycarbonate project on track; seed marketing with marquee customers.

Debt, Capex & Balance Sheet

• Total capex for the large projects is INR 11,500 crore, funded 60:40 debt–equity.
• Debt funding tied up at competitive rates; equity already contributed.
• Consolidated net worth INR 6,214 crore; debt-to-equity 0.27x.
• Spending to date around INR 1,200 crore; this year INR 1,500–1,600 crore planned.
• Total cumulative project spend about INR 3,000 crore; next tranche from banks.

Projects & Timelines

• Acetophenone to be commissioned with phenolics assets; integrated timeline aligned.
• MIBK and MIBC commissioning in August; rest in Q2.
• Polycarbonate commissioning targeted in H2 FY28-29; BPA to follow after.
• Phenolics capacity debottlenecking to 4 lakh TPA; capex ~INR 70–100 crore.
• Chemtech BPA integration links propylene to polycarbonate; downstream opportunities.

Outlook & Guidance

• Outlook remains positive; investments to improve earnings quality and cash generation.
• Geopolitical developments and price volatility may influence the operating environment.
• Management expects to deliver growth with ongoing capacity additions and downstream integration.
• Operating leverage, backward integration and digitization support margin expansion.

Q&A Highlights

• Q: Phenol capacity run-rate; Maulik says annualized run-rate near target.
• Q: MIBK/MIBC/acetophenone ramp; August for MIBK/MIBC, acetophenone with them, rest in Q2.
• Q: Spreads; Maulik declines to comment on spreads; cites operating leverage.
• Q: Peak debt post-polycarbonate; Sanjay: ~INR 8,000–8,500 crore; 1x leverage not expected.
• Q: Polycarbonate tie-ups; Maulik: NDAs prevent naming; anchor customer strategy.
• Q: Industry supply; Upadhyay: no new capacity concerns; domestic demand strong; phenol import duty reinstated.

Board changes

• Cessation of Shri Diteep Choksi as Independent Director effective on announced dates.
• Board as of August 7, 2026 has 13 directors, with Deepak C. Mehta as Chairman & MD.
• Independent directors include Punit Latbhai, Viput Shah, Arvind Nath Aerawal, Mahesh Chhabria, Bhumika Batra, Mitin Mehta, Adnan Ahmad.
• Earlier announcements on Apr 3, 2026 and May 15, 2026 regarding board changes have become effective.

Cessation of Independent Director

• Cessation of Shri Diteep Choksi as Independent Director effective August 7, 2026 upon completion of second term.

Plant commissioning

• Deepak Chem Tech Limited, a wholly owned subsidiary, commissioned the MIBK/MIBC plant at Dahej, Gujarat.
• Total capital expenditure incurred for the project is approximately ₹735 crore as of commissioning.
• Operations commence on 6 August 2026 at Dahej and include offsite utilities and infrastructure.