Deepak Nitrite shares rally over 6% as the subsidiary gets the nod to undertake a greenfield capex worth ₹5,000 crore

Deepak Nitrite’s wholly-owned material subsidiary, Deepak Chem Tech (DCTL), has received approval from the board of directors to undertake a project for manufacturing Potycarbonate Resins (PC) with an investment of around Rs 5,000 crore, including greenfield infrastructure capex. Subject to the completion of detailed engineering, the project will be funded through a suitable mix of debt and equity.

Towards this, DCTL has entered into agreements with Trinseo Deutschland Anlagengesellschaft mbH and Trinseo Europe GmbH (collectively referred to as Trinseo) to acquire PC manufacturing assets with a capacity of 165,000 Metric Tonnes and a PC technology License from Trinseo.

The purpose of the agreements is to acquire from Trinseo a PC technology license and Trinseo's PC manufacturing assets, including all proprietary equipment, situated at Stade in Germany. These assets shall be relocated to India and set up at Dahej, and thereby, the project for manufacturing Polycarbonate Resins, approved by the Board of Directors of DCTL, will be undertaken.

In addition, the company announced its Q2FY25 numbers during post-market hours on Wednesday. The total consolidated revenue for the quarter jumped 14.2% YoY to ₹2,032 crore for Q2FY25 as compared to ₹1,778 crore in the previous year’s similar quarter. On the operational front, the high cost of raw materials, which rose by 40%, dented the operational profitability of the company. Consequently, the net profit for the quarter also fell by 5.4% YoY to ₹194 crore.

Deepak Nitrite is a leading manufacturer of organic, inorganic, fine and speciality chemicals.