Deepak Nitrite Q3 FY26 Performance Highlights Strong Volume Growth Despite Margin Headwinds

Deepak Nitrite reported a 3% growth in consolidated total revenue to INR 1,983 crore for Q3 FY26, driven by higher volumes. EBITDA rose 16% year-on-year to INR 219 crore, though overall profitability reflects pricing pressures. Key milestones included the strategic integration of new capacities across the ammonia-nitration-to-amines value chain, positioning the company as a fully integrated player. Management remains cautiously optimistic for a better Q4 FY26 based on integration benefits and favorable trade developments.

Q3 FY26 Financial Summary

Deepak Nitrite announced a steady and resilient financial performance for the third quarter (ending December 31, 2025) and the nine-month period of FY26. Consolidated total revenue for Q3 FY26 stood at INR 1,983 crore, marking a 3% growth year-on-year and sequentially. EBITDA for the quarter reached INR 219 crore, a 16% year-on-year increase, demonstrating benefits from improved operating efficiencies and cost control.

For the nine-month period, consolidated revenue was INR 5,820 crore, with EBITDA at INR 658 crore. Profitability during this period was impacted by ongoing pricing pressure and one-off costs related to new project commissioning.

Segmental Performance Breakdown

Phenolics Segment: This business demonstrated consistency. Revenues were INR 1,334 crore, and EBIT grew 20% year-on-year to INR 145 crore, driven by higher utilization rates for phenol and acetone.

Advanced Intermediates Segment: This segment achieved strong top-line growth, with Q3 FY26 revenue of INR 652 crore (up 18% YoY). However, EBIT stood at INR 15 crore, reflecting continued margin compression due to global oversupply and Chinese dumping.

Strategic Integration and Growth Milestones

The company marked a defining milestone with the strategic integration and ramp-up of new capacities. The commissioning of the nitric acid plant and the nitration/hydrogenation plants completes the vertical integration across the ammonia-nitration-to-amines value chain, enhancing raw material security.

Long-term growth remains focused on value chain integration and specialty expansions:

  • The MIBK/MIBC project is expected to commission within the current quarter.
  • The polycarbonate project (India’s first integrated propylene-to-polycarbonate manufacturing) is progressing, with plant dismantling activities underway at Stade, Germany, toward relocation to India.

Outlook and Tailwinds

Management noted that global chemical markets remain complex due to pricing pressures and Chinese oversupply. However, several tailwinds provide optimism:

  • The India-EU trade deal is expected to provide seamless market access.
  • Favorable shifts in U.S. tariff policy, including the complete removal of Anti-Dumping Duty (ADD) on Deepak’s sodium nitrite exports, are expected to aid performance.

Management anticipates Q4 FY26 performance to be better than Q3 FY26, largely driven by efficiency gains from newly integrated assets.

Capital Expenditure Guidance

For the upcoming fiscal years, CAPEX guidance was provided:

  • FY26 CAPEX is estimated around INR 1,200–1,300 crore (including INR 100 crore already underway).
  • FY27 CAPEX outlay is projected at around INR 2,500 crore.

In terms of asset utilization, the newly commissioned nitric acid, nitration, and hydrogenation assets are expected to run at or close to 100% utilization from this quarter onwards.

Source: BSE

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