Life Insurance Corporation India holds 9.47 per cent stake: Company Board Approves Rs 3,500 Crore Investment Across 3 New Manufacturing Capacities to Boost Integrated Chemical Production
The final investment figure will be finalised after detailed engineering studies, and the funding will be sourced through an appropriate mix of debt and equity.
Deepak Chem Tech Limited (DCTL), a wholly-owned subsidiary of Deepak Nitrite Limited, has announced a major investment plan to strengthen its position in the chemical and advanced materials industry. In a meeting held today, the Board of Directors of DCTL approved the setting up of new manufacturing capacities for 300 KTA (kilo tonnes per annum) of Phenol, 185 KTA of Acetone, and 100 KTA of Isopropyl Alcohol (IPA), along with greenfield infrastructure, at a total investment of approximately Rs 3,500 crore. The final investment figure will be finalised after detailed engineering studies, and the funding will be sourced through an appropriate mix of debt and equity.
The new capacities are part of a strategic initiative to create an integrated manufacturing chain that will ultimately lead to the production of Polycarbonate Resins (PC). To further this vision, DCTL has already signed agreements to acquire and relocate a Polycarbonate plant from Germany to India. Once completed, this backward integration will position Deepak Nitrite among the most integrated producers of Polycarbonate, starting from basic chemicals like Phenol and Acetone.
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This expansion will be additive to Deepak Nitrite’s existing capacities, where its subsidiary Deepak Phenotics Limited currently operates 330 KTA of Phenol, 200 KTA of Acetone, and 80 KTA of IPA. The new greenfield facilities will significantly boost Deepak’s scale in these critical raw materials, supporting its long-term ambition to grow in the high-value specialty materials sector.
Additionally, Deepak Advanced Materials Limited, another wholly-owned subsidiary, has recently commenced production of Polycarbonate compounding at its newly commissioned facility in Savli, Vadodara, Gujarat. This marks the company’s forward integration into value-added plastic materials, catering to sectors such as automotive, electronics, and consumer goods.
In the Quarterly Results of December 2024, the company reported a revenue of Rs 1,903.40 crore, reflecting a YoY decline of 5.27 per cent compared to Rs 2,009.23 crore in December 2023. The operating profit stood at Rs 168.54 crore, marking a 44.68 per cent decline from Rs 304.65 crore in the same quarter last year. The profit after tax (PAT) declined by 51.45 per cent to Rs 98.09 crore from Rs 202.05 crore in December 2023.
In FY24, the company posted a revenue of Rs 7,681.83 crore, showing a decline of 3.64 per cent compared to Rs 7,972.06 crore in FY23. The net profit for FY24 stood at Rs 810.90 crore, registering a decline of 4.82 per cent from Rs 852.00 crore in FY23.
The current market price of the stock is Rs 1,807.35, and the market capitalization is Rs 24,651 crore. The stock is trading at a P/E ratio of 35.7x. Life Insurance Corporation India holds 9.47 per cent stake in this stock.
Disclaimer: The article is for informational purposes only and not investment advice.