Segment wise, Basic Chemicals Segment revenue stood at Rs 225.67 crore, down by 10% YoY and accounted for 21% of sales. PBIT from the same was up by 30% to Rs 55.87 crore and accounted for 23% of total PBIT with PBIT margin at 24.8% as compared to 17.3% for Mar19 quarter. De-growth in the BC segment is largely attributable to the closure of production facilities due to the national lockdown. The momentum has recovered post re-starting of the facilities and the Company will continue to leverage its cost leadership position in this segment to drive market share gains.

Fine and speciality chemicals segment revenue stood at Rs 158.01 crore up by 30% YoY and accounted for 15% of sales. PBIT from the same was up 91% to Rs 50.74 crore and accounted for 21% of total. PBIT margins stood at 32.1% as compared to 21.9% for Mar19 quarter. Strong demand and favourable realisations in export markets resulted in healthy performance in the FSC segment. Overall performance has also been bolstered by benefits accruing from backward integration initiatives and capacity expansion for certain products.

Performance products segment revenue stood at Rs 153.54 crore up by 22% YoY and accounted for 14% of sales. PBIT from the same was Rs 75.38 crore compared to Rs 47.9 crore in Mar19 quarter and accounted for 31% of total PBIT. PBIT margins stood at 49.1% as compared to 38% for Mar19 quarter. In recent quarters, DNL has recalibrated the mix of geographies and end-user industries for this segment which has resulted in better product acceptance and enhanced realisations. Leveraging its backward integrated operations, DNL has also capitalised on favourable demand-supply situation for DASDA caused by disruptions in China.

Phenolics segment revenue stood at Rs 530.96 crore compared to Rs 522.43 core in Mar19 quarter and accounted for 50% of sales. PBIT from the same was Rs 63.6 crore compared to Rs 76.79 crore and accounted for 26% of total PBIT. PBIT margins stood at 12% for Mar20 quarter compared to 14.7% in Mar19 quarter..

on the performance, Mr. Deepak C. Mehta, Chairman & Managing Director, said, "I am glad to announce that we have ended FY20 on a positive note with record topline performance and highest ever PAT despite disruptions caused due to the CoVID-19 pandemic. We have ticked all boxes with volume growth, improved realisations as well as cost control. This was further supported by reduced finance costs and a favourable rate of corporate tax. The growth in the fourth quarter could have been slightly higher as we lost 10 days of production due to the national lockdown.

We responded quickly to the circumstances by implementing a Business Continuity Plan which focused on ensuring safety and security of all our employees and adhering to the guidelines recommended by the respective Government authorities. We have re-commenced manufacturing operations in a phased manner based on approvals from local authorities and are focused on safely and steadily increasing utilisation levels while exercising tight control over costs.

Even as we navigate through the disruption caused to the operating environment, we remain confident of the agility and nimbleness of our business operations and believe we are well positioned to rebound quickly as the operating environment stabilizes. In addition to capitalising on demand for intermediates in domestic and international markets, we are working on plans to forward integrate into downstream derivatives of phenol and acetone, of which, the first project for IPA has already commenced commercial production."

Revenues stood at Rs. 526 crore in Q4FY20 as compared to Rs. 488 crore in Q4FY19, higher by 8% Y-o-Y. Revenue growth was impacted due to 10 days of lockdown in March. Performance was led by realisation gains in both Fine & Speciality Chemicals (FSC) and Performance Products (PP) segment.

EBITDA for the quarter stood at Rs. 185 crore, higher by 67% when compared to Rs. 111 crore in the same period last year. Robust EBITDA growth is due to ability to capitalise on favourable pricing environment for products across segments. EBITDA margin was 35.2% in Q4 FY20 compared to 22.7% in Q4 FY19. All segments reported improved margins.

PBT was at Rs. 160 crore in Q4 FY20, rising by 84% over Rs. 87.0 crore in the same period last year. PAT stood at Rs. 116 crore in Q4 FY20, as against Rs. 57 crore in Q4 FY19, registering growth of 106% on a y-o-y basis.

Performance for the year ended Mar20

For year ended Mar20, net sales rose 57% to Rs 4229.71 crore. The company operating margins increased 900 bps to 24.3%. As a result operating profits rose 148% to Rs 1025.8 crore.

Other income was Rs 35.2 crore compared to Rs 15.12 crore. Interest cost was up 38% to Rs 114.87 crore. Depreciation rose 80% to Rs 139.73 crore. PBT was up 201% to Rs 806.4 crore.

Effective tax rate was down 1100 bps to 24.2%. PAT reported was up 252% to Rs 611.03 crore.

For the 12 months, sales from the Basic chemical segment rose 5% to Rs 940.32 crore and accounted for 22% of sales. PBIT from the same was up by 44% to Rs 209.35 crore and accounted for 21% of total with PBIT margin at 22.3%.

Sales from the fine and speciality chemicals segment rose 9% to Rs 585.26 crore and accounted for 14% of sales. PBIT from the same was up 38% Rs 175.24 crore and accounted for 18% of total with PBIT margin at 29.9%.

Sales from the performance products segment rose 90% to Rs 767.12 crore and accounted for 18% of sales. PBIT from the same was Rs 418.62 crore and accounted for 42% of total PBIT with PBIT margin at 54.6%.

Sales from the phenolics segment was Rs 2000.86 crore compared to Rs 908.01 core in Mar19 and accounted for 47% of sales. PBIT from the same was Rs 187.31 crore and accounted for 19% of total with PBIT margin at 9.4%.

Update on Deepak Phenolics Ltd.

DPL ended FY20, it first full year of operations, with phenol production volumes just short of 200,000 tonnne or 100% capacity utilisation. The shortfall was due to shutdown of the plant for 10 days in March 2020 due to the nationwide lockdown. DPL commenced commercial production of Isopropyl Alcohol (‘IPA') at its manufacturing facility situated at Dahej, Gujarat effective April 21, 2020. This facility has capacity to manufacture 30,000 MT of IPA annually. IPA is a solvent primarily used by Pharmaceutical companies and is also used for manufacturing sanitizers. The company has stated that it plans to develop capacities to produce value added derivatives of phenol and acetone through forward integration. The launch of the capacity to manufacture IPA represents the first step towards achieving the vision of developing a comprehensive basket of downstream derivatives.

In view of the pan-India lockdown imposed by the Central Government to prevent and contain the spread of COVID 19, Deepak Nitrite temporarily suspended operations at all of its manufacturing facilities from March 25, 2020. Upon obtaining necessary permissions from the concerned authorities and after taking all necessary measures relating to safety as prescribed in the said permissions, the operations were resumed in a phased manner from mid - April 2020. The company believes in its ability to service customers and continue to obtain regular supply of raw materials and logistics services.

Sales impact in Q4 FY20 due to CoVID-19was estimated at Rs. 52 crore, while the impact on EBITDA was approximately Rs. 30 crore.

The Company has adequate liquidity to continue operations unabated. As of March 31, 2020, the debt equity ratio for DNL is 0.14x on a standalone basis and 0.69x on a consolidated basis, both of which remain within comfortable range of leverage

The company has acquired various parcels of land during the year for its expansion plans. This includes 127 acres acquired at Dahej, 1.4 acres acquired in Hyderabad adjoining its existing facility and 1.5 acres acquired in Roha again adjoining its existing facility. The Company has paid Rs. 141 crore in aggregate for these land parcels, which has been capitalized during the year

The disruption caused by COVID-19 is expected to have significant economic impact both locally and internationally. Although production has restarted at all plants , the supply chain has begun to recover and various restrictions on movement of material and people are set to be eased; restoring productivity to pre-lockdown levels is expected to be a gradual process. Eminent organisations have forecast degrowth in GDP, up to the extent of -15%, for the period April-Jun 2020 and July-Sep 2020.

In this backdrop, Deepak Nitrite will leverage fundamentals of its business along with its strong multiyear relationships with global customers as it seeks to maintain market share across products. Demand for specialty chemical intermediates is expected to be resilient as reduced demand from established customers and end-user industries is partially replaced by increased demand for intermediates required for products such as pharmaceuticals, agro-chemicals, sanitizers and disinfectants.

The immediate focus is to conserve cash, restore operational efficiency and productivity while further de-risking the business by rebalancing product mix across a more diversified base of end user industries. The Company is cautiously optimistic about its immediate term prospects even as it gears up for the multiplier effects of international restrictions and the nationwide lockdown on economic growth in the months and quarters ahead.

The scrip is currently trading at Rs 501