I guess safeguard duties are unlikely and probably any existing custom duties are/shall also be removed.
Quote:
“The Budget also proposes reduction in Customs Duty on raw materials and inputs imported by domestic manufacturers. The Duty of 10% on fuel, chemicals and plastics would be fully removed.”
Disc: Invested
Q3 results (Link)
Looks very strong. @hitesh2710 as you are invested so any comments?
Disclosure: Tracking, not invested
Investor Presentation - https://www.bseindia.com/xml-data/corpfiling/AttachLive/e17aea08-608c-4eea-89f1-7c8ae10d5d7e.pdf
Result looks good. But have to see the result going forward ,As high base of this year kickin and dasda bonanza may not be there after this quarter ( partially q4 may benefit). Only saviour is if phenol spread start move up then we can see this much bottomline next year otherwise in my opinion next year bottomline may be flat to slightly negative . And not sure how much of it already priced in
Disc: invested
DEEPAKNITRITE March 4, 2020 to consider declaration of #InterimDividend on equity Shares of the Company for the financial year 2019-20 and to fix Record Date.
After very long time to c #interimdividend will b given.
Generally they give final dividend.
Good steps taken by management for interim dividend.
Many companies are declaring interim dividend to beat the new income tax rules that come into effect w.e.f. 1st April. It could just be a preponement of final dividend and not something extra. Need to wait and see.
Any fellow members can provide inputs on trend for current phenol spreads please
Thank you.
When almost the whole country was in stand still mode, The prices of China phenol are bound to decrease. Even car sales have crashed 92% in Feb month.
could you share some link , from where you got this? Thanks
@Znilesh : Here is the link
https://t.co/VUV3W2tDwm?ssr=true
@Dragon : You are right and thats the point i am trying to make. Deepak stock price action has been doing so well inspite of the downward trending phenol prices. That goes to show the confidence market participants have in the future outlook of this business. Situation in China has started to normalize now which should be mirrored by phenol price in the short to medium term.
Speciality chemicals in general can do well as a sector in the current backdrop of global situation. Deepak Nitrite for me remains a hold for next few years.
The cost of raw material is also coming down significantly as can be seen from crude prices. So that will make up
Commercial production of IPA started from April 21 - https://www.bseindia.com/xml-data/corpfiling/AttachLive/77956447-beb1-45f3-866f-d4775ed4d575.pdf
What could be the impact of this on the company?
Deepak Nitrite:DASDA prices slump to ₹ 400/ kg from ₹ 1,000+/ kg
Since lot of you guys maybe following the co thus thought of putting it. DASDA which forms part of the Performance products segment of Deepak Nitrite led to significant jump in segment profitability due to sudden spike in prices to over ₹ 1,000/ kg during early 2019. DASDA prices which soared to over ₹ 1,000/ kg have declined to ₹ 400/kg as the largest global player from China has slashed prices from US$ 12/ kg to US$ 4/kg. Domestic prices have been in correction mode since January 2020 from ~₹ 1,000+ levels to ~₹ 800 levels by March 2020. Demand from the user industry such as textiles, paper has been lacklustre due to the current lockdown which is also likely to reflect in volumes
Against the fall in DASDA prices and its impact, a positive development in Deepak Nitrite has been the ramping up of production of IPA which is used in sanitisiers. (deepak fertilisers remains the biggest player in IPA and probably will end up benefitting the most because of its small size in terms of mcap) . Deepak Nitrite uses acetone as one of its raw materials in IPA and acetone is produced as a by product in phenol production. Acetone which earlier used to fetch negative or negligible realisation now becomes a raw material in producing IPA.
Besides this, the revenue streams of DN remain well diversified and hence going ahead it can weather the price correction in dasda.
But as said by you, dasda price correction remains a concern as it was a big contributor to stellar profit growth shown by the company in past few quarters.
Company is also reportedly working on derivatives of phenol which can be value added products of phenol and might not need too much capex.
disc: no positions as of now, had bought earlier and sold during meltdown, but remains in the watchlist as of now.
Hitesh,
As acetone is co product ,given phenol demand is lacklustre coming quarters. How can company able to manufactur required acetone to produce pent up demand of IPA?
Regards,
Sathish
Deepak Nitrite remains one of the biggest producers of phenol in the country and phenol remains one of the basic chemicals in a lot of other chemical and pharma products. Prices of phenol would fluctuate but I think the production will remain strong. So production of acetone a by product will continue. The other aspect which needs to be seen is how much acetone is needed to cater to in house need to manufacture IPA.
On the topic of IPA, deepak fertiliser has announced launch of its hand sanitiser conforming to WHO standards, namely Cororid, launched in mid April. Now from being a chemical company with largely commodity products, it has a B2C product. 
Talk about grabbing opportunities. Needs to be seen how this launch affects profitability and market perception.
deepak fert sanitiser launch.pdf (1014.6 KB)
