Deepak Fertilisers rallies on hopes of additional orders as China halts urea export

Industrial chemicals and fertilisers manufacturer Deepak Fertilisers and Petrochemicals Corporation Limited’s stock soared as much as 5.10 per cent to hit an intraday high of Rs 664.40 per share on hopes of additional orders after media reports suggested that China has asked fertiliser makers to halt urea exports due to price surge in the second-largest economy of the world.

The development is likely to benefit Indian companies producing urea as they hope to get additional orders.

The stock was trading at Rs 656.65 per share, up nearly 3.90 per cent, at 12:08 pm, on BSE.

Established in 1979 as an Ammonia manufacturer, Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL) is among India’s leading producers of fertilisers and industrial chemicals. The multi-product Indian conglomerate with an annual turnover of over half a billion US Dollar with a product portfolio spanning industrial chemicals, bulk and specialty fertilisers, farming diagnostics and solutions, fresh produce, and technical ammonium nitrate among others.  

The market capitalisation of Deepak Fertilizers is Rs 8,237.02 crore, according to BSE. The company competes with Aries Agro, Chambal Fertilisers, Coromandel International, and Madras Fertilisers among others in this segment.

In July, the chemicals company reported a surge of 57 per cent in its Q1 net profit at Rs 110 crore, against 255 crore QoQ. Its revenue came in at Rs 2,313 crore, down 17 per cent, against Rs 2,795 crore in the last quarter of the previous fiscal.

Operating profit, also known as earnings before interest, tax, depreciation, and amortisation (EBITDA), declined 40 per cent to Rs 281 crore while margin came in at 12.1 per cent against 16.8 per cent QoQ.