Deepak Fert Posts Higher Profit In June Quarter

(Article first published in The Financial Express on July 20, 2004)

Deepak Fertilizers and Petrochemicals has recorded a profit after tax of Rs. 13.2 crore for the quarter ended June 30 as compared to Rs. 13.2 crore in the same period in last year. Net sales were at Rs. 112 crore as against Rs. 110.8 crore for the corresponding period the previous year.

SC Mehta, Managing Director, Deepak Fertilisers said sales had hit a plateau because of constraints of natural gas supply, a primary feedstock. But, large gas finds in KG Basin and LNG imports should improve availability of gas in future, Mr. Mehta said.

In anticipation, the company is already enhancing capacity by going for retrofits for almost all the plants. We are maximizing production with marginal investments", Mr. Mehta said.

The company has already tied up strategic alliances with Gail, ONGC, Shell. "By 2005, our supplies should have improved considerably." That apart, the company is also investing Rs. 48 crore in captive power generation plants to save on energy costs" Mr. Mehta added.

Mr. Mehta also indicated that the company would be exploring possibilities of not just focusing on fertilizers but also offer a rage of agro services, contract farming, expanding seeds business, agro processing and leveraging its marketing and distribution network. This would, however, depend on further clarity at the policy level, Mr. Mehta said. Fertilizers account for 30 per cent of Deepak's revenues which was Rs. 471.4 crore during 2003-2004.

In the chemicals business too, the company is looking at moving up the value chain. For instance, instead of just supplying chemicals for explosives in mines, the company is looking at offering total mining solutions.

In a bid to de-risk the business and have foot in the sunrise sector, the company also diversified into the real estate business. To encash the real estate boom in Pune.

The company is building a Rs. 100 core specialty mall over 10 acres to be completed by September 2005 to cater to end to end interior and exterior needs of residential and commercial buildings.

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