Deepak Nitrite

Deepak Nitrite reported a mixed Q3 FY26, with consolidated total revenue reaching INR 1,983 crore, marking a 3% growth both year-on-year and quarter-on-quarter. EBITDA for the quarter increased by 16% year-on-year to INR 219 crore, improving the EBITDA margin to 11% from 10% in the corresponding period last year, driven by enhanced operating efficiencies and cost control. For the nine-month period, consolidated revenue stood at INR 5,820 crore with an EBITDA of INR 658 crore and PAT of INR 331 crore.

The Phenolics segment delivered a consistent performance, with revenues from operations at INR 1,334 crore and EBIT at INR 145 crore, a 20% year-on-year increase, due to higher plant utilization and process optimization. The Advanced Intermediates segment recorded stable revenue growth of 18% year-on-year and 11% sequentially, reaching INR 652 crore. However, EBIT for this segment was INR 15 crore, impacted by persistent pricing pressures, global oversupply, and aggressive import competition.

The company is actively progressing on several key projects. The MIBK/MIBC project is targeted for commissioning within Q4 FY26, while the polycarbonate project, India's first integrated propylene to polycarbonate manufacturing, is seeing dismantling activities underway in Germany for relocation to India, with commissioning expected in the next 2-2.5 years. The nitric acid plant, along with nitration and expanded hydrogenation plants, were commissioned in mid-December 2025, with 100% utilization expected from Q4 FY26 onwards, enhancing raw material security and margins.

The global chemical industry faces a complex operating environment marked by persistent pricing pressures, heightened competitive intensity, and uneven demand, largely influenced by global trade flows, protectionism, and aggressive Chinese dumping. These factors have led to margin compression in select product lines and impacted profitability during the nine-month period. The company acknowledged that some Q3 margin impacts were self-inflicted due to tactical decisions to maintain market presence by buying raw materials at spot prices.

Deepak Nitrite is accelerating its transition towards green energy, aiming to source 60% to 70% of its energy mix from hybrid renewable sources. This initiative is part of a broader commitment to improving energy efficiency and embedding green chemistry principles across all operations, aligning with responsible care and sustainability goals.

The company has a pipeline of about 15 new products in various stages of R&D and piloting, targeting applications in mining chemicals, flame retardants, personal care, flavors, fragrances, and polymers. Commercialization of some of these products is expected in the first half of FY27. Additionally, favorable shifts in US-India tariff policy and the complete removal of anti-dumping duty on sodium nitrite exports to the US are expected to boost export opportunities.

The company plans to spend approximately INR 1,200-1,300 crore in FY26, with an additional INR 2,500 crore planned for FY27. These investments are directed towards expanding specialty and commodity chemical manufacturing capacities, including the integrated complex for polycarbonate and other advanced derivatives, as well as the R&D facility, with about INR 100 crore allocated for the R&D facility.