Basic Evaluation of Deepak Fertilisers: Because the world’s inhabitants grows, it should improve stress on meals provides and demand for greater crop yields. To realize that, chemical firms will assist farmers with a cheap means of bettering the yield and the standard of their crops. One such chemical firm is Deepak Fertilisers.
On this article, we are going to carry out the Basic Evaluation of Deepak Fertilisers and Petrochemicals Company Ltd. Preserve studying to seek out out extra
Basic Evaluation of Deepak Fertilisers
We’ll begin with a quick overview of India’s main producers of fertilisers and industrial chemical compounds, then transfer on to a market overview, enterprise segments, monetary evaluation, and future plans anticipated by the corporate to achieve a aggressive benefit over the remainder of the market, and at last, a abstract to wrap up the article.
Firm Overview
Certainly one of India’s prime producers of commercial chemical compounds and fertilisers is Deepak Fertilisers & Petrochemicals. A multi-product Indian conglomerate based in 1979 as an ammonia producer with an annual income of over $500 million USD and a product line that features industrial chemical compounds, bulk and specialty fertilisers, farming diagnostics, and options, recent produce, technical ammonium nitrate, and value-added actual property, which incorporates India’s 1st & largest revolutionary idea retail vacation spot for House Interiors & Design.
DFPCL is the Main producer and marketer of Isopropyl Alcohol (IPA) in India and the Largest Producer of Nitric Acid in South East Asia. To be able to meet the distinctive wants of the trade and clients, the corporate is creating specialised grades of nitric acid and IPA.
DFPCL is among the main producers of Technical Ammonium Nitrate on this planet, it’s the solely producer of prilled TAN solids in India and in addition manufactures medical-grade Ammonium Nitrate. Finest-in-class technical providers have been launched by the corporate to spice up downstream productiveness for the mining trade’s finish customers.
Enterprise Segments
The Firm is engaged within the manufacture of Industrial Chemical compounds (Nitric Acid, Isopropyl Alcohol, Methanol, and Carbon Dioxide) Crop Diet (Nitro Phosphate, Nitrogen Phosphorus Potassium variants, Water Soluble Fertilisers, and Bentonite Sulphur), and Technical Ammonium Nitrate (Mining Chemical compounds).
Business Overview
An essential sector that considerably contributes to the nation’s agricultural manufacturing and normal financial development is India’s fertiliser and chemical trade.
The necessity for fertilisers has grown over time as a result of their significance in offering crops with wanted vitamins. Between 2023 and 2028, the fertiliser market in India is anticipated to extend at a CAGR of 4.7%, with a forecasted worth of USD 1160.18 billion at the moment.
Greater than 80,000 industrial items are produced by India’s extraordinarily different chemical sector, which can be typically divided into bulk chemical compounds, specialty chemical compounds, agrochemicals, petrochemicals, polymers, and fertilisers.
The Indian chemical compounds market was price $178 billion in 2019 and is projected to develop by 9.3% yearly to $304 billion by 2025. By 2025, the demand for chemical compounds is anticipated to extend by 9% yearly, and by 2030, it’s anticipated that the chemical sector would contribute $383 billion to India’s GDP.
As a result of improve in demand from end-user sectors together with meals processing, private care, and residential care, the specialty chemical compounds market in India is increasing. Specialty chemical producers in India are rising their manufacturing capability to satisfy the elevated native and worldwide demand.
India’s chemical trade has an opportunity to develop considerably as multinational firms attempt to cut back the chance of their China-reliant provide chains.
Deepak Fertilisers – Financials
Income & Internet Revenue Development
Deepak Fertilisers operational gross sales have elevated at a CAGR of 10.88% throughout the earlier 5 years, from Rs 6,742 crore in FY19 to Rs 11,301 crore in FY23. On low bases, the annualized improve of working revenue and internet revenue is appreciable, at 36.49% and 74.96%, respectively.
The desk beneath illustrates the corporate’s operational income, working revenue, and internet revenue over the previous 5 fiscal years.
Fiscal YearOperating gross sales(Cr)Working revenue(Cr)Internet revenue(Cr)
202311,30121651221
20227,6631356687
20215,808961406
20204,68546589
20196,74245773
5-yr CAGR10.88836.4975.66
Working & Internet Revenue Margins
The agency aggressively explored new markets, decreased operational expenditures, and at last grew its prime line by buying uncooked supplies from cheaper sources, considerably rising the corporate’s earnings.
Fiscal YearOperating Revenue Margin(%)Internet Revenue Margin(%)
202319.9010.80
202215.268.97
202113.366.99
20207.381.9
20195.071.13
Return Ratios: RoCE & RoE
The profitability ratios have improved considerably through the years. The corporate has optimized its turnover, and successfully and effectively they’ve used their capital successfully and effectively by lowering pointless prices.
Fiscal YearROCE(%)ROE(%)
202323.3623.88
202217.9517.46
202115.0214.81
20207.84
20198.643.36
Debt/Fairness & Curiosity Protection
Brief-term loans are often required within the manufacturing enterprise to pay suppliers, procure uncooked supplies, and workers’ wages. Through the years, the corporate has efficiently been in a position to cut back the debt-to-equity ratio by correctly using working capital, and the identical applies to the curiosity protection ratio.
Fiscal yearDebt/EquityInterest Protection(Occasions)
20230.7111.55
20220.679.04
20210.874.13
20201.331.43
20191.441.49
Key metrics of Deepak Fertilisers
Earlier than we hit the top, allow us to rapidly revise the important thing metrics of the inventory.
CMP₹ 565Market Cap(Cr.)₹ 7,136 Cr
EPS₹ 95.9Stock P/E5.90
RoCE26.3 %ROE27 %
Promoter Holding45.46 %Ebook Worth₹ 401
Debt to Equity0.73Price to Ebook Value1.45
Internet Revenue Margin10.8 %Working Revenue Margin19.20%
Future Plans of Deepak Fertilisers
The corporate has introduced the demerger of its mining chemical compounds and fertilizers enterprise finally it should improve its profitability and money injection.
The corporate desires to shift its general enterprise to maneuver from commodity to specialty, value-added, and revolutionary merchandise.
The corporate desires to broaden the manufacturing and storage of its key uncooked materials – ammonia in Q1 of FY24 which can cut back the influence of risky ammonia pricing and it’ll improve the margins.
In Conclusion
The federal government is educating farmers on the precise use of fertilizers and pesticides to spice up soil fertility, which is elevating the demand for fertilizers. The central authorities is providing subsidies to fertilizer producers, which can assist the fertilizer and chemical industries prosper within the subsequent few years.
Deepak Fertilisers & Petrochemicals Company has big potential to enter into new markets And the corporate has robust financials through the years.
With that, we full our article on elementary evaluation Deepak Fertilisers and Petrochemicals Company. We hope you discovered this publish helpful and fascinating. Good luck along with your investments!
By using the inventory screener, inventory heatmap, portfolio backtesting, and inventory examine instrument on the Commerce Brains portal, buyers achieve entry to complete instruments that allow them to determine the very best shares additionally get up to date with inventory market information, and make well-informed funding choices.
Begin Your Inventory Market Journey In the present day!
Need to be taught Inventory Market buying and selling and Investing? Make certain to take a look at unique Inventory Market programs by FinGrad, the educational initiative by Commerce Brains. You possibly can enroll in FREE programs and webinars obtainable on FinGrad at the moment and get forward in your buying and selling profession. Be a part of now!!
