Deepak Nitrite 's wholly owned subsidiary, Deepak Chem Tech Limited, has successfully raised ₹35 crores through the allotment of preference shares to another subsidiary, signaling a strategic move to bolster its capital base and support ongoing projects.

Key Details of the Transaction

Purpose and Implications

The fund infusion aims to strengthen Deepak Chem Tech's capital structure and support its operational and expansion plans. Specifically, the raised capital will be utilized to:

1. Reinforce the company's financial position
2. Support ongoing project expenses
3. Enhance operations at its fluorination plant
4. Fund various projects across multiple sites in Gujarat

Strategic Significance

This internal funding mechanism within the Deepak Nitrite group showcases a coordinated effort to optimize resource allocation among its subsidiaries. By channeling funds from Deepak Phenolics to Deepak Chem Tech, the parent company is effectively:

• Ensuring efficient capital utilization within the group
• Supporting the growth initiatives of its specialized chemical manufacturing arm
• Potentially setting the stage for expanded operations in the fluorination segment

Industry Context

The move comes at a time when the specialty chemicals sector in India is experiencing significant growth and attracting investments. Deepak Chem Tech's focus on fluorination technology positions it strategically in a high-value segment of the chemical industry.

Outlook

While the immediate impact of this capital infusion on Deepak Nitrite's consolidated financials may be neutral due to the inter-subsidiary nature of the transaction, the long-term benefits could be substantial. The strengthened capital base of Deepak Chem Tech is expected to support its growth trajectory and potentially contribute to the overall performance of the Deepak Nitrite group in the coming years.

Investors and market observers will likely keep a close watch on how this capital is deployed and the subsequent developments in Deepak Chem Tech's projects across Gujarat.

Deepak Nitrite Limited , a leading chemical manufacturing company, has reported sequential growth in its Q2 financial results, driven by improved performance in its Phenolics segment and strategic expansions across its business units.

Financial Highlights

For the quarter ended September 30, Deepak Nitrite reported:

Segment Performance

Phenolics Segment

• Revenue: INR 1,333.00 crore (Q2), up 2% QoQ
• EBIT: INR 145.00 crore, up 23% QoQ
• EBIT Margin: 11%

The Phenolics segment showed robust performance, achieving record quarterly production and sales of Isopropyl Alcohol.

Advanced Intermediates Segment

• Revenue: INR 588.00 crore (Q2), down 3% QoQ
• EBIT: INR 23.00 crore
• EBIT Margin: 4%

The segment faced challenges due to tariff actions and underpriced imports but maintained market share through proactive customer engagement.

Operational Highlights

1. New Product Launches: Deepak Nitrite introduced 7 new products in Q2, focusing on life sciences and effect chemicals applications.

2. Capacity Expansions:

   • Commissioned a hydrogenation asset at Deepak Chem Tech with an investment of INR 118.00 crore.
   • Inaugurated a state-of-the-art R&D center at Savli with an investment of INR 100.00 crore.

3. Integrated Polycarbonate Project: The company is progressing on its mega complex project, India's first integrated polycarbonate facility, expected to be operational by March 2028.

4. Sustainability Initiatives: Deepak Nitrite is transitioning towards achieving 60% of its energy consumption from renewable sources.

Future Outlook

The company remains cautiously optimistic about H2, expecting improvements in the Advanced Intermediates segment due to:

• Better volumes for agrochemical-linked intermediates from Europe and other geographies.
• Enhanced contribution from debottlenecked capacities.
• Improved ability to capture value across the chain with upstream integration assets.

Maulik Mehta, Executive Director and CEO, commented, "As we move forward, the operating environment remains complex and challenging. We continue to uphold our commitment to responsible chemistry, creating value responsibly for all our stakeholders, our people and our planet."

Deepak Nitrite's focus on innovation, sustainability, and strategic expansions positions it well for future growth in the specialty chemicals sector.

About Deepak Nitrite Limited

Deepak Nitrite Limited is a leading chemical manufacturing company in India, known for its diverse product portfolio in Basic Chemicals, Fine & Speciality Chemicals, and Performance Products segments. The company serves various industries including agrochemicals, pharmaceuticals, plastics, textiles, and more.