What’s new

• New concentrated nitric acid plant is running at only 45% capacity due to technical issues.
• Strategic feedstock hedging helped lift Q4 EBITDA margin to 18%.
• MIBK/MIBC project on track for commissioning in Q2 FY27; polycarbonate plant due June 2028.

Why it matters

The 45% utilisation rate at a brand-new plant is a direct hit to expected volume growth and near-term earnings. Hedging bought the company some margin room in Q4, but the operational stumble at the nitric acid unit overshadows it.

What we’re watching

• Resolution of the technical issues at the nitric acid plant and a timeline for ramp-up.
• Commissioning progress on the MIBK/MIBC project in Q2 FY27.
• Whether Q1 FY27 actually beats Q4 FY26 as management expects.

The full read

Deepak Nitrite's Q4 earnings call revealed a mixed picture. A 45% utilisation rate at its new concentrated nitric acid plant, due to technical issues, is a clear operational drag. The company's strategic feedstock hedging mitigated some cost pressure, supporting an 18% EBITDA margin on ₹2,127 crore in revenue and ₹383 crore in EBITDA. Management offered a confident outlook, guiding that Q1 FY27 should beat the just-reported Q4 FY26. The project pipeline is advancing, with MIBK/MIBC set for commissioning this quarter and the polycarbonate plant on track for June 2028. The near-term focus is the nitric acid plant. A new unit running at half capacity is a problem that hedging gains cannot mask.

Primary source: BSE · NSE