Any current/future capex/capital investment/strategic investment?

Deepak Fertilizers has an ongoing fast-paced CAPEX plan focusing on two key projects: the technical ammonium nitrate project at Gopalpur and the nitric acid project at Dahej. These projects are backed by 40 years of operating experience and target markets where the company already has a presence. Expected total CAPEX drawdowns are around Rs. 300-400 crores additional in the current fiscal year, with a total project CAPEX around Rs. 3,000 crores. About 30% of this CAPEX will be funded by equity; the balance through debt, with peak debt expected near Rs. 6,000 crores by end FY25-26 or early FY26

Future growth expectations in sales/revenue/volumes?

Mining Chemicals demand expected to grow 10-12% CAGR over next 5-6 years driven by coal mining, power, and infrastructure sectors. Current India demand for Technical Ammonium Nitrate (TAN) around 1.5-1.6 million tons expected to grow to 2.2-2.3 million tons, driven by infrastructure and mining growth. Capacity expansions (e.g., 50 KTPA de-bottlenecking recently done) to support volume growth and meet customer demand. Specialty fertilizers like Croptek showed 70% YoY growth; Rabi season prospects robust due to above-normal monsoon. Industrial Chemicals may see volume growth in specialty grades

Future growth expectations in earnings/operating earnings/profits/EPS?

Consolidated EBITDA margin of ~18% is expected to be sustainable going forward, with some cyclicality. New CAPEX projects (Gopalpur technical ammonium nitrate and Dahej nitric acid) to start contributing from FY26-27 with IRRs of 18-20%, supporting profitability growth. Total operating revenue and EBITDA showed significant growth in Q2 FY25, signaling strong momentum. Gradual increase in specialty grade sales (from 20% currently, aiming to double in 2-3 years) will improve margins. Mining Chemicals business and Industrial Chemicals business expected to grow with demand recovery post-mo

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Deepak Fertilisers & Petrochemicals Corp LtdQ3 FY24Chemicals & Petrochemicals

Deepak Fertilisers & Petrochemicals Corp Ltd Q3 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹1,590P/E: 19.0Market Cap: ₹16.6K CrSector: Chemicals & Petrochemicals

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Mining Chemicals demand expected to grow 10-12% CAGR over next 5-6 years driven by coal mining, power, and infrastructure sectors.
→Current India demand for Technical Ammonium Nitrate (TAN) around 1.5-1.6 million tons expected to grow to 2.2-2.3 million tons, driven by infrastructure and mining growth.
→Capacity expansions (e.g., 50 KTPA de-bottlenecking recently done) to support volume growth and meet customer demand.
→Specialty fertilizers like Croptek showed 70% YoY growth; Rabi season prospects robust due to above-normal monsoon.
→Industrial Chemicals may see volume growth in specialty grades (steel grade nitric acid, pharma-grade IPA), with IPA volumes expected to improve post anti-dumping duty on imports.
→Mining Services division executing multiple projects, indicating growth trajectory.
→Overall company targeting sustained revenue growth through specialty products, backward integration benefits, and expansion projects operational by FY26-FY27.

Margin guidance

Category 3

→Consolidated EBITDA margin of ~18% is expected to be sustainable going forward, with some cyclicality.
→New CAPEX projects (Gopalpur technical ammonium nitrate and Dahej nitric acid) to start contributing from FY26-27 with IRRs of 18-20%, supporting profitability growth.
→Total operating revenue and EBITDA showed significant growth in Q2 FY25, signaling strong momentum.
→Gradual increase in specialty grade sales (from 20% currently, aiming to double in 2-3 years) will improve margins.
→Mining Chemicals business and Industrial Chemicals business expected to grow with demand recovery post-monsoon and anti-dumping duty on IPA supporting margins.
→Continued deleveraging efforts with debt expected to peak around Rs. 6,000 crores by FY25-26, with repayments thereafter improving financial health.
→Long-term outlook positive supported by alignment with India’s growth story and portfolio diversification.
→Earnings and EPS expected to grow supported by revenue growth, margin expansion, and new capacity ramp-up by FY26-27.

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Fundraise plans

Yes

- The company expects additional drawdowns of around Rs. 300 to 400 crores for new projects in the current fiscal year. - Total expected capex-related drawdowns are approximately Rs. 4,000 crores. - Peak debt is projected to reach around Rs. 6,000 crores by end of FY 25-26 or early FY 26-27. - About 30% of the Rs. 3,000 crores capex for two major projects (Gopalpur and Dahej) will be funded through equity, balance through debt. - No specific mention of fresh equity fundraising beyond this capex-related requirement. - The company continues to focus on deleveraging and has prepaid Rs. 200 crores of debt ahead of schedule. - The management will share more detailed bifurcation of debt related to specific business verticals separately. Overall, the focus is on managing capex funding through a combination of debt and equity without indicated new equity raise plans beyond the 30% component for ongoing projects.

Order book

The transcript does not explicitly mention the current or expected order book or pending orders for Deepak Fertilizers & Petrochemicals Corporation Limited as of Q2 FY25. However, some relevant points can be inferred: - The Mining Chemicals business is seeing growth backed by increasing coal, cement, and steel production, signaling strong demand prospects. - The Technical Ammonium Nitrate (TAN) segment is expanding, with capacity additions planned by FY26 and FY27. - The company has undertaken strategic expansions in projects like Gopalpur and Dahej, expecting incremental capacities and ramp-up by FY26-27. - The Total Cost of Ownership (TCO) model in Mining Chemicals is maturing, with 15 projects executed, indicating growing business traction. - Demand drivers in crop nutrition and industrial chemicals remain robust, supporting future order inflows. - No specific order book figures or pending order data were disclosed in the call transcript.

Capex plans

Yes

→Deepak Fertilizers has an ongoing fast-paced CAPEX plan focusing on two key projects: the technical ammonium nitrate project at Gopalpur and the nitric acid project at Dahej.
→These projects are backed by 40 years of operating experience and target markets where the company already has a presence.
→Expected total CAPEX drawdowns are around Rs. 300-400 crores additional in the current fiscal year, with a total project CAPEX around Rs. 3,000 crores.
→About 30% of this CAPEX will be funded by equity; the balance through debt, with peak debt expected near Rs. 6,000 crores by end FY25-26 or early FY26-27.
→The CAPEX plans are considered risk-mitigated due to experience, existing market presence, and stable demand drivers aligned with India's growth story.
→Expansion in Mining Chemicals includes a recent 50 KTP capacity enhancement to meet growing demand.

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