Can you please mention the page number of 2016 annual or upload the screenshot from the annual report?
It is correct that India is a major importer of IPA but Deepak Nitrite has be cost competitive to capture the market share.
Also, promoter of-course has in mind that phenol & acetone has to be used to produce more value-added products. But given present scenario and future trends they have no other option but to move into more value-added products.
Very soon India will have major overcapacity of phenol and acetone. Both the chemicals are in over-supply globally also. This will keep the prices in check.
Now, investors have to keep a very close eye on company. This company can go either way mostly dependent on promoters ability to use capex wisely & execute perfectly and to expand into value-added products. If they fail to deliver value-added products in 2 years time, debt can eat-up this company.
2 Likes
So we will have to monitor:
a. the performance of the Company based on what they will do with value added products 2 years down the line.
b. Technical Capabilities of the Company in executing CAPEX for such value added specialty products.
c. I had previously also questioned why did the Company went for Capex of Phenol & one of the reason given was
As per @Ansh_Gupta
" Regarding this, I think their idea might be to have a large pool of raw materials available first (instead of importing at higher costs), and then think about the possible downstream products in which they can venture (depending on demand and feasibility), have more options available as to the different products they can make rather than setting up a new plant for a specific downstream product without having the raw materials in the first place"
and
as per last post of one of the boarder:
“Very soon India will have major overcapacity of phenol and acetone. Both the chemicals are in over-supply globally also. This will keep the prices in check.”
Other reports also suggest of excess supply coming
to India due to the proposed CAPEX
IMHO , the above two statement are a bit self contradictory.Please correct me if my interpretation is wrong.
So can we safely presume that the current valuations are hinged on future CAPEX of value added products and not on the basis of current product mix.
2 Likes
India imposes Provisional anti dumping duty on phenol import from Thailand and US. Positive for Deepak.
4 Likes
Anyone has details of how much ADD levied and how much already there on phenol?.
How is Provisional ADD different from normal ADD ? Also, it’s levied only for imports from U.S and Thailand which comes close to $150 m USD. But India imports nearly $600 m USD worth of Phenol. Remaining $450 m USD worth of imports will be without ADD.
I believe, though it would have a positive impact on Deepak Nitrite , but not very much as market anticipates - 17 % up today. !!!
2 Likes
Today’s article in www.businesstoday.in highlighting importance of DGTR.
Deepak Phenolics, Hindustan Organics and SI Group had approached DGTR complaining that they had to sell phenol below cost of production due to rise in imports India imports around $600 million worth of phenol every year.
https://praj.net/praj-sanitizer-technology/
Praj Industries Q1 Concall excerpt (https://praj.net/investor-lounge/financial-reports/conference-call-transcripts/)
Haresh Hindocha: Just want more detail on this single largest Pharma grade alcohol facility. What is the size or is this the first order in US and couple of details about it?
Shishir Joshipura (CEO PRAJ INDUSTRIES): It is not the first order for us in US. We have built several plants in United States but as I
was mentioning that the pandemic has given a new found rise to the requirement of
Pharma grade alcohol. So if you earlier looked at the alcohol market, we were looking at
fuel ethanol which was one largest segment followed by potable alcohol which is a
drinking part of it and then third there was a small section of industrial alcohol but now
Pharma grade alcohol has walked in as third largest segment in my opinion, in our
understanding. So this is creating a big demand so that’s first positive development in the
market. Catching on that, one of the leading producers of ethanol in United States wanted
to set up this facility at their Wisconsin plant to produce Pharma grade alcohol and Praj
has a technology which is absolutely unparalleled in terms of its efficiency and its output
characteristics. So different markets in the world have different requirements, different
specifications for Pharma grade alcohol. United States happens to be the toughest and this
is where our technology won head over heels for everybody else and we are building this
facility for them now. The current capacity, the plant that we are building is 50 kilo tonnes
per annum.
Haresh Hindocha: So what must be the, our part of the project cost in that particular order roughly?
Shishir Joshipura: It’s roughly about Rs. 50 crore contract for us.
Haresh Hindocha: And what is the execution time?
Shishir Joshipura: As I was mentioning that people who are putting up Pharma grade alcohols, they want everything yesterday.
Haresh Hindocha: I know, the big boom in Pharma sector, that’s why I am asking you.
Shishir Joshipura: A big push in demand and so we are contracted to supply this plant towards end of this year, calendar year.
Haresh Hindocha: What is the situation in India in the Pharma industry? Are you getting the same responseCfrom the Indian Pharma sector?
Shishir Joshipura: The Indian Pharma grade alcohol, specifications are different.
Haresh Hindocha: Then also what is the response in that sector, I mean domestic sector?
Shishir Joshipura: Two things, probably I can mention here that if you were to talk to my friends in the
ethanol producer, the sugar companies that are producing ethanol today; they will tell you
that this boom in sanitizer application has actually helped them realize better margins in
their businesses because they are able to divert part of their production, for the
production of hand sanitizer etc. So as I was mentioning there are different requirements
in each market for different applications but in the toughest market in the world which is
United States our technology has stood clearly differentiated compared to our
competition.
My opinion:
Apart from IPA manufacturers sanitiser buisness is being looked by other industries also, so we do not know how long the high margins will continue in this segment.
1 Like
As far as Indian Market is concerned, Sanitiser Pricing is controlled by the Government.
3 Likes
Hi,
I have NOT read/bought the report. However, I found the title interesting while google searching for Deepak Nitrite. Thought of sharing it here.
https://thedailychronicle.in/news/1042245/optical-brighteners-market-is-thriving-worldwide-2020-2027-leading-players-brilliant-colors-inc-teh-fong-min-international-co-ltd-deepak-nitrite-limited-republic-powered-metals-rpm/
While searching, I found that optical brighteners are replacing earlier used bluing agents in detergent whitener. What I understand is that Deepak Nitrite has some advantages to make optical brighteners since they already make the required ingredients for optical brighteners which gives them a better margin. Even though the overall market size is less compared to their other products.
If anybody can add anything to it (or correct me if I am wrong) related to Deepak Nitrite, it would be helpful.
Disc: Invested. So probably biased.
Thanks in advance,
Anto
6 Likes
Market size and margins matters
1 Like
prices are no more control under GOI.
Deepak Nitrite recently added to 2 of FTSE Indices, Request members to share some link or source where we can get list of FTSE Indices scripts.
Same way where we can find Morgan Indices details. I have Google it but not getting complete list.
1 Like
It has been added to FTSE Global Equity Index Series Asia Pacific Ex Japan Ex China after September 2020 Semi-Annual Review. Attached below is full review list.
GEIS_AsiaPacific_ex_Japan_ex_China_TN_Sep_2020_Further_Amendment.xlsx.xlsx (746.2 KB)
6 Likes
Can any body throw light on the current pricing for IPA???
deepak nitrite has formed a 100% wholly owned subsidiary for mfg of chemical intermediate products
bseindia link - https://www.bseindia.com/xml-data/corpfiling/AttachLive/43ef056a-aa96-45d9-b7ac-a332d392b072.pdf
4 Likes
- Can somebody please throw some lights on the margin of Deepak with IPA?
- What is the demand-supply scenario globally and in India when it comes to IPA?
- Is Deepak planning any capex for Phenol/Acetone downstreams?
Disc: Invested (8% of PF)