Now while others struggle for LNG due to closure of Strait of Hormuz.
Deepak Fert will have access via Norway at a discounted price.
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what is the source of you saying that the LNG is at a discounted price? The agreement for oil and gas purchases esp long term gas purchases are always linked to benchmark plus a premium plus freight (normally the prevailing freight rates). If you have concrete information about “discounted” LNG then that is very unique and huge advantage to the company.
PS: I work in oil and gas sector. No positions/holdings in Deepak Fertilizer.
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DFPCL contract is based on Brent crude + NG TTF
Brent don’t increase like TTF because we can store Crude but it is difficult to store LNG, you need to have infrastructure to store it at -160degC.
Due to this TTF prices will go up 3-4 times during crisis, but brent will go up like 50-60%.
As the contract is based on Brent + NG TTF, Deepak will get it at discounted price.
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Poor Q4 results. Further delayed commissioning of the new plants.
Despite the rise in ammonia prices, the profitability hasn’t been translated well. Debt levels have risen.
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1.pdf (373.0 KB)
Agreed on your observations, but we can wait for management commentary and way forward journey of the company.
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Q1 fy27
Looks like things are falling in place as per the plan and this is clearly reflected in Q1 fy27 results. There has been a significant improvement in margins during Q1, driven by multiple initiatives such as LNG gas supply from Equinor at lower rate, lower cost of making Ammonia vs higher spot price, B2c value chain etc.
The company expects annual cost savings of around ₹300 crore from the Equinor gas contract. LNG contract should significantly reduce ammonia production costs compared to the current spot price (around $600).
Management is expecting the completion of gopalpur TAN and dahej Nitric Acid plants by Q2 and the capcity utilization of 80% by Q4. If achieved, the company should be able to deliver annual revenue of ₹12,000–14,000 cr with an ebitda margin in the range of around 20%.
@r8b8 The acquisition of Chardham Chemicals was not on your list of possible takeover candidates. Do you think this company can provide all the critical inputs required for Platinum Blasting Services, perhaps in a way similar to Regenesis Industries?
Also, how do you see the mining/blasting solutions business evolving from here?
Disc - invested and highly biased.
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