Deepak Nitrite 's wholly-owned subsidiary, Deepak Chem Tech Limited (DCTL), has made a significant move to strengthen its capital base. The company has issued and allotted ₹68 crore worth of 9% Optionally Convertible Redeemable Preference Shares (OCRPS) to Deepak Phenolics Limited (DPL), another wholly-owned subsidiary of Deepak Nitrite.

Key Details of the Allocation

• Number of Shares: 68,00,000 OCRPS
• Face Value: ₹100 per share
• Total Value: ₹68.00 crore
• Allotment Date: August 18, 2025

Purpose and Impact

The primary objective of this capital infusion is to bolster DCTL's financial position and support its ongoing projects and general corporate purposes. This strategic move is expected to prepare the company for growth in the specialty chemicals sector.

About Deepak Chem Tech Limited

DCTL, incorporated on October 9, 2020, is a relatively new player in the chemical industry. The company operates a state-of-the-art fluorination plant and is actively pursuing various projects across different sites in Gujarat.

Financial Performance

DCTL's financial performance has shown significant growth over the past two years:

Transaction Details

The allotment of OCRPS to Deepak Phenolics Limited is considered a related party transaction, as both DCTL and DPL are wholly-owned subsidiaries of Deepak Nitrite. However, the company has stated that the transaction is conducted on an "arm's length" basis, with shares allotted at par value.

Shareholding Structure

Post this allotment, Deepak Nitrite continues to hold 100% of the equity share capital of DCTL. Additionally, Deepak Nitrite, along with DPL, indirectly holds 100% of the preference share capital of DCTL.

This strategic financial move underscores Deepak Nitrite's commitment to strengthening its subsidiaries and positioning them for future growth in the competitive specialty chemicals market.

Deepak Nitrite , a leading chemical intermediates producer in India, has reported a significant decline in its financial performance for the first quarter. The company's consolidated net profit fell by 45% year-over-year, reflecting the challenges faced by the chemical industry amid global economic headwinds.

Financial Highlights

• Consolidated net profit decreased to ₹112.25 crore, down from ₹202.53 crore in the same quarter last year.
• Revenue from operations declined by 13% to ₹1,889.88 crore, compared to ₹2,166.84 crore in the previous year's corresponding quarter.
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) stood at ₹197.00 crore, a 40% decrease from ₹328.00 crore in the corresponding quarter of the previous year.
• EBITDA margin compressed to 10.00% from 14.26% in the prior year period.

Segment Performance

Deepak Nitrite's performance was impacted across its two main business segments:

1. Advanced Intermediates:

   • Revenue declined by 15% to ₹605.33 crore
   • EBIT (Earnings Before Interest and Taxes) fell by 47% to ₹35.47 crore

2. Phenolics:

   • Revenue decreased by 11% to ₹1,303.96 crore
   • EBIT dropped by 43% to ₹117.90 crore

Market Challenges

The company faced several challenges during the quarter:

• Global economic deceleration and continued oversupply from China led to pricing pressure and compressed margins across various product lines.
• The agrochemicals segment experienced a slower-than-expected recovery, particularly in Europe, amid cautious purchasing behavior from global customers.
• Geopolitical tensions and sluggish demand in major economies created a volatile market environment.

Management Commentary

Mr. Deepak C. Mehta, Chairman & Managing Director, commented on the results: "The first quarter has reinforced our belief that 'Destination Bharat' is not just a strategic choice but a resilient foundation for continued long-term growth of our business. Amidst a volatile geopolitical environment marked by shifting global trade dynamics and elevated tariffs, Deepak continues to benefit from its India-centric, import-substitution-led business model."

He added, "Domestic consumption remains robust, and our backward and forward integration strategy is proving effective in helping us navigate pricing pressures and demand fluctuations across global markets."

Future Outlook

Despite the current challenges, Deepak Nitrite remains optimistic about its future prospects:

• The company is actively expanding into new markets to diversify its customer base and reduce dependency on large buyers.
• Multiple projects are underway, including capacity expansion, securing stable input supplies, and driving both backward and forward integration.
• A shift towards renewable energy is expected to enhance energy security and strengthen the sustainability footprint across operations.
• The company's R&D center is driving innovation in Life Sciences, Specialty, and Application-based intermediates.

Deepak Nitrite's management expressed confidence in the company's deeply integrated and scalable business model, positioning it to play a pivotal role in shaping a self-reliant chemical ecosystem for India.

As the chemical industry navigates through these challenging times, Deepak Nitrite's focus on innovation, import substitution, and global market expansion is expected to strengthen its agility and responsiveness to evolving customer needs.