{"id":126858,"date":"2022-01-28T03:30:43","date_gmt":"2022-01-28T08:30:43","guid":{"rendered":"https:\/\/44.250.171.167\/?p=126858"},"modified":"2022-10-05T05:57:19","modified_gmt":"2022-10-05T09:57:19","slug":"deepak-nitrite-limited-q3-fy22-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/deepak-nitrite-limited-q3-fy22-earnings-conference-call-insights\/","title":{"rendered":"Deepak Nitrite Limited Q3 FY22 Earnings Conference Call Insights"},"content":{"rendered":"<p><iframe loading=\"lazy\" title=\"Deepak Nitrite Limited Q3 FY22 Earnings Concall\" width=\"500\" height=\"375\" src=\"https:\/\/www.youtube.com\/embed\/yzKyTRXFzjo?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p><strong>Key highlights from Deepak Nitrite Limited (<a href=\"https:\/\/44.250.171.167\/symbol\/DEEPAKNTR\/\">DEEPAKNTR<\/a>) Q3 FY22 Earnings Concall<\/strong><\/p>\n<p><strong>Management Update:<\/strong><\/p>\n<ul>\n<li>The company reported that it achieved its highest ever quarterly topline performance, both on a standalone and a consolidated basis. Overall, DEEPAKNTR expects demand to continue to stay robust.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><strong>Q&amp;A Highlights:<\/strong><\/p>\n<ul>\n<li>Chintan Modi from Haitong Securities asked that at a global levels, what kind of capacities are likely to get added in phenol in 2022 and \u201923. Sanjay Upadhyay CFO answered that there are capacities coming up in China, the major of this will be for the captive use. Sanjay added that even if something comes, the company is not too much worried.<\/li>\n<\/ul>\n<ul>\n<li>Chintan Modi from Haitong Securities also enquired that with benzene production globally, does the company see some shortage in its production over the next 3-5 years or a likely price increase. Maulik Mehta CEO said that the company is not seeing any expectation of shortage of benzene as there is also new capacity that is coming online during the year.<\/li>\n<\/ul>\n<ul>\n<li>Kumar Saumya of Ambit Capital enquired about the phenol gross margin compression and the reasons for it. Sanjay Upadhyay CFO answered that phenol at this level, the capacity utilization is high and also the turnover is high. It&#8217;s only a question of margin that it cannot remain at a level of 30%, 31%. It has to settle down somewhere. So the company believes margin is settling down. And there might be ups and downs.<\/li>\n<\/ul>\n<ul>\n<li>Kumar Saumya of Ambit Capital clarified if the phenol gross margin would settle down around 29%, considering if the prices are at last quarter level. \u00a0Sanjay Upadhyay CFO replied that the company would rather go with an EBITDA percentage of between 20-23%.<\/li>\n<\/ul>\n<ul>\n<li>Dipak Saha with Savart asked that on the basic intermediate segment, reason for the nine-month basis, there was a 67% growth in the revenue front, but volume growth was 10%. Maulik Mehta CEO commented that the company has underutilized capacity both in basic intermediate and specialty chemicals despite a strong order book.<\/li>\n<\/ul>\n<ul>\n<li>Dipak Saha with Savart also asked that on the FSC segment, there was YoY revenue declined and was it because of the logistical challenges. Maulik Mehta CEO replied that there was no issue on the demand front, but the decline was due to logistics. However, added that volume was also a reason of the decline.<\/li>\n<\/ul>\n<ul>\n<li>Rohit Nagraj from Emkay Global enquired that on phenol, post commissioning of the downstream products in phenol, how much of it will be captively utilized. Maulik Mehta CEO answered that the projects the company has announced it will consume around 30-35%. The current projects won\u2019t consume much, but there are plans in pipeline and ultimately will consume 40%, 45%, 50% phenol in captive. Today it will be around 20-25%.<\/li>\n<\/ul>\n<ul>\n<li>Rohit Nagraj from Emkay Global asked that some performance products did well in 3Q, but while going into 4Q, if the company is seeing any kind of margins or price contraction. \u00a0Maulik Mehta CEO replied that the good performance will continue in 4Q.<\/li>\n<\/ul>\n<ul>\n<li>Nitin of Yes Securities asked that how much of capex the company incurred in nine-months and if the 2Q announcement of spending on downstream and brownfield remains the same. Sanjay Upadhyay CFO answered that whatever the company has announced in 2Q it stands and won\u2019t change. On QIP, the resolution is of INR2,000 crores.<\/li>\n<\/ul>\n<ul>\n<li>Levin Shah from Value Quest queried about the phenol segment, if the company is seeing sequentially the costs going down and if better profitability will be seen going forward. \u00a0Sanjay Upadhyay CFO answered that there won\u2019t be major profitability but next quarter the company has a power plant running that that will save energy cost. Sanjay added that margins will go up and down, but the company will look at improving capacity. Therefore the range of margin of 29%, 30%, 35% will be too high for a commodity, but should be at 20-24% range.<\/li>\n<\/ul>\n<ul>\n<li>Levin Shah from Value Quest also asked about the Fine &amp; Speciality Chemicals segment if margins will be improving from here and what\u2019s a sustainable margin for this segment. Sanjay Upadhyay CFO answered that 35-40% range is a fair range for this segment. In 3Q, it\u2019s low but the company expects a better 4Q.<\/li>\n<\/ul>\n<ul>\n<li>Rohan Gupta with Edelweiss asked that on the phenolics business, if there is any one-off or higher raw material costs that\u2019s impacted phenol profitability in Q3. Sanjay Upadhyay CFO answered that utilities, steam costs coming from high-priced coal is one of the major reasons. The company is also seeing higher propylene price. But most important has been the cost of utilities. Additionally, the company said freight costs have been an ongoing contributor in many cases.<\/li>\n<\/ul>\n<ul>\n<li>Nitin Agarwal from DAM Capital enquired that on the Fine &amp; Speciality Chemicals how many products the company is looking to add over the next two years. Maulik Mehta CEO answered that it\u2019s not a small number, but can\u2019t give the specifics. The company added that Specialty Chemicals for the company is turning out to be a very attractive play.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Deepak Nitrite Limited (DEEPAKNTR) Q3 FY22 Earnings Concall Management Update: The company reported that it achieved its highest ever quarterly topline performance, both on a standalone and a consolidated basis. Overall, DEEPAKNTR expects demand to continue to stay robust. \u00a0Q&amp;A Highlights: Chintan Modi from Haitong Securities asked that at a global levels, [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":125416,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,5753,12],"tags":[8519,9019],"class_list":["post-126858","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-industrials","category-other-industries","tag-chemicals","tag-specialty-chemicals"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":140958,"url":"https:\/\/alphastreet.com\/india\/deepak-nitrite-limited-q3-fy23-earnings-conference-call-insights\/","url_meta":{"origin":126858,"position":0},"title":"Deepak Nitrite Limited Q3 FY23 Earnings Conference Call Insights","author":"Praveen","date":"February 10, 2023","format":false,"excerpt":"Key highlights from Deepak Nitrite Limited (DEEPAKNTR) Q3 FY23 Earnings Concall Q&A Highlights: [00:17:26] Nirav Jimudia from Anvil Research asked about the rationale behind backward integration in fluorination space. 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Maulik Mehta ED replied that capex is spanning across products that are\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":132941,"url":"https:\/\/alphastreet.com\/india\/deepak-nitrite-limited-q1-fy23-earnings-conference-call-insights\/","url_meta":{"origin":126858,"position":2},"title":"Deepak Nitrite Limited Q1 FY23 Earnings Conference Call Insights","author":"Praveen","date":"August 11, 2022","format":false,"excerpt":"https:\/\/youtu.be\/krErJUJ_nho Key highlights from Deepak Nitrite Limited (DEEPAKNTR) Q1 FY23 Earnings Concall Management Update: DEEPAKNTR said that the company is increasing its capacity for in-house waste treatment and is expected to result in a decrease in its footprint. 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