Deepak Nitrite: New Plant Online Amidst Q2 Profit Slump, Stock Dips

CHEMICALS
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AuthorAarav Shah|Published at:
Deepak Nitrite: New Plant Online Amidst Q2 Profit Slump, Stock Dips
Overview

Deepak Nitrite's subsidiary commissioned a ₹85 crore plant in Gujarat. However, the company reported a sharp 39% year-on-year drop in consolidated net profit for the September 2025 quarter, driven by rising input costs and challenging market conditions. Revenue also saw a decline, though standalone profitability showed improvement.

Q2 Earnings Hit by Costs, Market Woes

Deepak Nitrite Limited reported a stark 39% year-on-year decline in consolidated net profit for the quarter ending September 30, 2025, reaching ₹118.7 crore. This downturn from ₹194.2 crore in the prior year was primarily attributed to elevated input costs and prevailing market dynamics that pressured margins. Total revenue for the period decreased by 6.4% to ₹1,901.9 crore, reflecting weakened demand across key chemical segments.

Standalone Operations Show Resilience

Despite the consolidated downturn, the company's standalone profitability offered a brighter spot. Revenue from standalone operations rose to ₹615.92 crore for the September 2025 quarter, a modest increase from ₹604.70 crore in the same period last year. Profit before tax on a standalone basis, while down year-on-year to ₹119.09 crore from ₹158.34 crore, showed significant sequential improvement from ₹40.93 crore in the preceding quarter.

Operational Expansion in Gujarat

In a separate operational development, Deepak Chem Tech Limited, a wholly-owned subsidiary, successfully commissioned its nitration and second hydrogenation plant at Dahej in Gujarat on January 11, 2020. The total capital expenditure for this project amounted to approximately ₹85 crore as of its commissioning date, marking a significant investment in expanding manufacturing capabilities.

Market Reaction

Shares of Deepak Nitrite Limited closed trading at ₹1,537.10 on January 19, marking a slight decrease of ₹9.30, or 0.60%.

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