India's Deepak Fertilisers posts worst profit drop in over 4 years

Coromandel International

26/07/2023 10:54

BENGALURU, July 26 (Reuters) - India's Deepak Fertilisers and Petrochemicals  DPFE.NS  on Wednesday posted its worst fall in
profit in over four years, dragged by lower sales.
    The company's consolidated net profit fell 74.6% to 1.10 billion rupees ($13.4 million), its biggest decline since March 2019.
Revenue from operations fell 23.7%.
    The company separately announced the appointment of Deepak Rastogi as chief financial officer with effect from Aug. 1.
    For further earnings highlights, click:  urn:newsml:reuters.com:*:nFWN39C0YE
        
  
        KEY CONTEXT
  
    Deepak Fertiliser's revenue from its chemicals segment fell 30% while revenue from fertilisers dropped about 15% from a year ago.
    Analysts at Kotak Institutional Equities say inventory destocking by clients and weak demand from certain end users are projected to
continue for the majority of the first-half of the current fiscal in the chemicals industry.
    China's post-pandemic reopening has disappointed, and the resulting weakness in demand, combined with over-capacity across a wide
range of sectors, is causing a surge in exports and, as a result, severe pressure on product pricing, the analysts said.
    Rival Coromandel International  CORF.NS  will report their earnings on Thursday.


     PEER COMPARISON
                                        Valuation (next  Estimates (next            Analysts' sentiment             
                                          12 months)       12 months)                                               
                             RIC        PE      EV/EBIT  Revenue  profit  Mean         Number    Stock to price     Div yield (%)
                                                DA       growth   growth  rating*      of        target**           
                                                                                       analysts                     
 Deepak Fertilisers and       DPFE.NS     8.57     6.33   1.29     NULL   BUY                 1        0.86         1.69
 Petrochemicals Corporation                                                                                         
 Chambal Fertilisers and      CHMB.NS     8.21     5.72  -22.83   21.93   HOLD                3        0.87         2.78
 Chemicals                                                                                                          
 Coromandel International     CORF.NS    13.77     9.30  -14.50    4.84   BUY                 9        0.81         1.24
 Paradeep Phosphartes         PRAO.NS    10.93     8.68   -3.83   42.76   STRONG BUY          2        0.74         NULL
    
 * Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
 ** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
    
    APRIL-JUNE STOCK PERFORMANCE      
   
    
    -- All data from Refinitiv
    -- ($1 = 82.0025 Indian rupees)




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 (Reporting by Navamya Ganesh Acharya in Bengaluru; Editing by Varun H K)
 ((Navamya.GaneshAcharya@thomsonreuters.com; +91 8805175330 ;))