Deepak Nitrite Limited (DEEPAKNTR) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Deepak Nitride Q4FY26 Earnings Conference Call. At the outset, I would like to clarify that certain statements made or discussed on the conference call today may be forward-looking in nature, and a disclaimer to this effect has been included in the investor communications shared with you earlier. The result documents have been shared with you earlier and have also been posted on company's website. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and then zero on your touch-down phone. Please note that this conference is being recorded. I now hand the conference over to Ranjit Sirumalla from IIFL Capital. Thank you and over to you, sir.

Thank you, Sagar. Good afternoon, everyone, and thank you for joining us on Deepak Nitrite Q4 and FI26 earnings conference call. Today, we have with us Mr. Malik Mehta, Deputy Managing Director of the company, Mr. Sanjay Upadhyay, Director, Finance and Group CFO, and Mr. Somsekar Nanda, CFO of Deepak Nitrite Limited. We will begin the call with opening remarks from the management team, followed by an interactive B&A session. To begin, Mr. Malik Mehta will share views on the operating performance and the growth plans of the company, followed by Mr. Sanjay Upadhyay, who shall take us through the financial and segmental performance. I now invite Mr. Mehta to share his opening comments. Thank you, and over to you, sir.

Good afternoon, everybody, and a warm welcome to all of you on Deepak Nitride's Q4 and FY26 conference call. Our results documents were shared with I will cover the key operational, strategic, and financial highlights for the quarter and year ending March 2026. Mr. Upadhyay will subsequently take you through the detailed financial review, following which we will be happy to address your question. The global chemical industry continues to operate in a challenging environment during Good morning, everyone. Concurrently, as logistics disruptions persisted, both suppliers and buyers identified new opportunities by swiftly adapting and securing alternative channels. While global demand conditions remain mixed, domestic demand in India continued to witness relatively stable momentum across several end industries, including automotive, infrastructure, pharmaceuticals, electronic, polymers, and other downstream sectors. Consequently, integrated and reliable manufacturing companies such as Deepak with a strong operational capability were able to capitalize on emerging opportunities arising from the evolving global supply chain land. In this demanding environment, Deepak Group has demonstrated a remarkable agility in the face of adversity, delivering strong operational and financial results for the fourth quarter of FI. Consolidated revenue stood at 2,127 crores, compared to 2,202 crores in FY25, and 1,983 crores in Q3 of 38 crores. Sequential growth on a year-on-year basis. The margins improved significantly to 18% and enhanced plant fungibility in customers and markets. Furthermore, continuous plant process refinement and cost optimization initiatives coupled in sustained export revenue mix of our domestic franchise, while continuing to maintain meaningful engagement across export markets. For FY26, consolidated revenue stood at 7,947 crores, while EBITDA and PAT stood at 1,041 crores and 5.51 crores, respectively. Coming to the segmental performance, advanced intermediates witnessed a healthy growth trend during Q4, boosted by stable domestic demand and a favorable pricing environment. Neutralizing the impact of slower exports caused by global logistics of 108 crores on a sequential basis to 34 crores compared to 15 crores in Q3 FY26. Profitability drivers included an optimized product mix and superior realization. A deepened integration continues to provide a competitive edge through an increased raw material self-sufficiency and reduced supply chain volatility. The phenolic segment delivered strong performance during the quarter despite geopolitical disruptions impacting supply of critical feedstocks. Revenue from operations for Q4 stood at 1,429 crores, while EBITs stood at 287 crores, compared to 239 crores in Q4 by stable plant operations, recovery, and the discipline procurement strategy. Ongoing process optimization and debottlenecking initiatives continue, and they will improve operational flexibility while strengthening our domestic market leadership position. During 2016, we witnessed successful commissioning, stabilization, and ramp-up of Deepak Chemtech's hydration and hydrogenation facilities at the age. These projects enhance raw material security, reduce external dependency, improve structural cost competitiveness, and strengthen our positioning as a deeply integrated chemical manufacturer. Our long-term growth remains anchored in value chain integration and specialty chemical expansion. We witnessed a steady progress of our multipurpose agrochemical intermediates and MIBK-MIBC projects, which are scheduled for commissioning in Q2 FY21. And India's first fully integrated polycarbonate facility execution is on track. For this project, Tempec has entered into a strategic long-term agreement with Praxair India to establish a dedicated on-site hyco plant at our Zahej facility. Under this build-on-operate model, Praxair India will manage the dedicated on-site infrastructure, allowing us to maintain a sharp focus on the polycarbonate resin project, significantly enhancing execution visibility, and reduce upfront investment and supply chain visibility. As a backdrop of heightened geopolitical tensions, we continue to strengthen our competitive position through disciplined execution and focused cost leadership initiatives. During FY26, we undertook a comprehensive cost optimization program aimed at improving product yields, enhancing energy efficiency, as well as increasing manufacturing productivity through digital and macroeconomic uncertainties may continue creating near-term volatility across global markets. We believe the industry is gradually moving beyond the most disruptive phases. I will hand over the call to Mr. Sanjay Upadhyay, who will take you through the detailed financial performance and key operational update.

Thank you, Malik. Good afternoon, everyone, and thank you for joining us today on Earning Coal. I will take you through the highlights of the financial results for the quarter and year-ended March 31, 26. During Q4, FY26, domestic revenue stood at approximately 1,835 crores, while export revenue stood at 2,92 crores, resulting in domestic to export revenue mix of 86 to 14. For the full year FY26, domestic revenue stood at 6,791 crores, while export revenue stood at 1,156 crores. For the quarter, the company reported consolidated revenue of 2,127 crores compared to 2,202 crores in Q4, FY25, and 1,983 crores in Q3, FY26. Performance during the period was supported by stable domestic demand and improved realizations across established product categories. EBITDA for Q4 stood at $383 crores compared to $339 crores in Q4 FY25 and $219 crores in Q3 FY26. EBITDA margin improved significantly to 18% during the quarter compared to 11% in Q3 FY26. This was underpinned by strategic combination of proactive feedstock procurement, improved Core Product Realization and Structural Margin Benefits for Backward Integration and By-Product Realization. PBT before Excessional Item stood at 301 crores while PAT for the quarter stood at 220 crores, reflecting growth of 9% year-on-year and 120% quarter-on-quarter. Earning per share for Q4 stood at 16.11. For the full year FY26, consolidated revenue stood at 7,947 crores while EBITDA stood at 1,041 crores and PIT stood at 551 crores. Please note that revenue and PBT excludes dividend income of 91 crores in FY26 and 98 crores in FY25 along with one-time Lend Transfer gain of 13 crores in FY25. The Board has recommended a final dividend of 7.5 per equity share of FY26, reaffirming our commitment to delivering consistent shareholder value, continuing to invest in strategic growth and long-term value creation. Now, coming to segmental performance, the advanced intermediate segment recorded healthy operational momentum during Q4-FI26. Revenue for the quarter increased to 708 crores compared to 654 crores in Q4-FI25 and 652 crores in Q3-FI26, reflecting growth of 8% year-on-year and quarter-on-quarter basis. A bit improved to 34 crores compared to 15 crores in Q3 FY26. The business proposed a stable volume growth during the quarter, along with rising gain for end products supported by improving demand across key and user applications. The company continues to focus on portfolio optimization, product expansion, and cost efficiency, and deeper customer engagement to strengthen long-term competitiveness within this segment. The phenolic segment delivered a strong gain during the quarter despite continued volatility of its stock and global supply chain. Revenue from operations for Q4FI26 stood at 1,429 crores, while EBIT stood at 2.87 crores compared to 2.39 crores in Q4FI25 and 1.45 crores in Q3FI26. EBIT margins improved significantly to 20% during the quarter. Performance was supported by improved spread across the portfolio, stable downstream demand, and integrated manufacturing benefits. Ongoing process optimization and debottling initiatives continue to strengthen operational flexibility, cost competitiveness, and market responsiveness. On operational front, operational excellence and cost discipline remain key to priorities during FI26. The company continued its focus to process optimization, energy efficiency initiatives, manufacturing productivity improvements, and digital transformation programs across manufacturing locations. Finance costs for Q4FI26 stood at 19 crores, reflecting borrowings associated with ongoing growth investments and strategic expansion projects. Depreciation and amortization actions stood at 63 crores, following capitalization of newly commissioned assets. The company's balance sheets remain healthy and resilient, supported by prudent capital allocation and disciplined financial management, Now, coming to growth initiatives and outlook, near-term industry conditions are expected to remain influenced by geopolitical developments, Chinese supply dynamics, U.S. tariff policies, and feedstock volatility. Again, this backdrop company remains focused on strengthening integration, expanding it into value-added downstream chemistries, and enhancing differentiated capabilities across high-potential product segments. Strategic investments in polycarbonate project and downstream chemistry expansion continue progressing in line with the plant timelines and are expected to support product diversification, import substitution, and margin improvement in long-term growth. Supported by a strong integrated manufacturing platform, diversified portfolio, discipline, execution, and resilient balance sheet, DeepApna trade remains well positioned to navigate near-term volatility while creating sustainable long-term value for the stock tenders. With that, I would now request the moderator to open the forum for question-answer session, please.

Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and then 1 on their touch-down phone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Your first question comes from the line of Sanjay Sjain with ICICI Securities. Please go ahead.

Good afternoon. Thanks for taking my questions. Question on the nitric acid, can you just help us understand in this quarter, what was the utilization? Did we achieve the margin profile we were looking at? I know this is not a right quarter, but still, are we track on to get that 9,100 crores of EBITDA addition for the nitric acid which we planned earlier? That's my first question. Okay, Sanjesh, thanks for the question. So in Q4, while we did start the plant, we were unable to run it, you know, on a consistent basis because of some technical issues that took place during the quarter under review. Now we're working along with the technology supplier and the equipment supplier to address these. So once the plant is under stable operations, we do anticipate the kind of target that we're looking at. But during this quarter under review, we were roughly at about 45% of utilization. And hence, for the balance, we had to secure nitric acid from the market in order to ensure that our products continue to be manufactured and sold.

Got it. Got it. That's clear.

My second question is on the phenolic side. I know very volatile and a difficult quarter, but just wanted to understand on the raw material availability, That is propylene. How much of our capacity right now we are running and what's the scenario on the propylene availability? Are we able to run the plant at full or are we still running suboptimal because of the availability of raw material? And on the spread, again, some of the listed players did highlight that there is a significant difference in the price of phenolic product in China market and India market. Should it sustain for a few more quarters before we converge, or do you think that conversion will happen much sooner than what we think?

So, color on that will be really helpful.

So, Sanjesh, just a clarifying question. You're referring to Q1 or Q4?

I'm referring to Q1 and a little color on the Q1, Q2 will be really helpful.

Okay. Thanks. So, first of all, I'll just highlight that in Q1, in the first part of April, when there was a concern about feedstock availability, we also pre-poned the annual maintenance. So both of those were kind of addressed within the same period of time. I think it was about 10, 11 days. And what we've done in any case in the meanwhile is we have enough of the intermediate product so that we were able to continue to supply to the market. So our plant efficiencies, which are a factor of feedstock as well as operational capabilities, continued relatively unhindered. So we expect that Q1, our productivity and our efficiencies will continue to be in the same improving trend as they have been quarter-on-quarter. Q4 to Q1 will also have some marginal benefit. And I want to highlight that because this is also a product where there is global availability, I don't want to comment on this principle of adogicity where we assume that the next month is going to be a factor of the last month. So, given that, I want to share that our profitability will continue to remain healthy, will continue to be on an improving trend as compared to Q4, and we have enough feedstock as well as finished product to be able to cater to India's growing requirement. So, I don't anticipate a challenge on that front because of propylene or anything like that. Wherever possible, we have ensured that we have secured all our relevant raw material, and wherever relevant, we have ensured that we are able to pass through our cost increases. Nonetheless, we will see that during this quarter and the next quarter, we are remaining very close to our customers, engaging with them on a regular basis, so that wallet share and market share always remains something that we maintain. That's quite clear, Malik Bhai. One last question from my side. Any comment on MIBK, MIBC commissioning? When can we expect or do you think this is not the right time to start a new plant and probably you would wait for another quarter to see how the industry or uncertainty

settle and then we go for the new product?

So, we are already, you know, basically we're finishing with the mechanical completion of the plant, and we will soon be getting into the pre-commissioning cycle, as it may be, and at some point, maybe perhaps at the tail end of Q1 or the early part of Q2 is when we will be looking at commissioning of the asset, Because the asset is commissioned along with a couple of other plant assets as well. So, we kind of remain on track with that. Very clear. Thanks, Malik Bhai, for answering all those questions and best of luck for the coming quarter. Thank you, Sanjay.

Thank you. Your next question comes from the line of Nirav Chimodia with Annual Wealth. Please go ahead.

Good afternoon, sir, and thanks for the opportunity. So, first of all, congratulations on an improved set of numbers this quarter. So, first question is on the standard on business. So, given the kind of capexes what we have announced, like one for a fluorinated molecule of 220 crores, which we announced, and which was supposed to start operations in Jan, plus some six, seven new products, which we have told us that, That have already started production, and they are at the various stages of customer approvals. So how do we see FY27 specifically from the standard-owned business point of view, given this new product and B, given the kind of raw materials what we use for the standard-owned business like orthozydene, ammonia, sulfuric acid, AHF, How we are secured in terms of the availability of these key raw materials and demand for some of our products which are specifically custom made for the export markets. So, if you can share your thoughts here, that would be very helpful.

Sure. So, Nirav, I'll answer both your questions. First question was with regards to new products. So, the 6-7 new products as well as the sorenated molecules, etc. We've already started the manufacturing for the things, the commercial scale validation batches, and those are already either supplied to customers and we've received positive feedback or in the process of being transported to customers. So in all of these, as we said earlier, we anticipate a commercial production on a regularized basis from Q3 onwards because this will reach our export customers towards the end of Q3 in time for their CY26 requirements. So we remain broadly on track. We're constantly engaging with customers, updating them about the current possibility, and they are also appreciating this process. So, so far, I do not anticipate any concern on those, including the chlorinated molecule, as well as the non-sluorinated molecules. Now, with regards to the volatility on the feedstock, such as, as you mentioned, orthoxyline or toluene and others. So, what happened was that in the beginning of Q4, I was tracking what was taking place in the Middle East, and in the end of January, early February, we noticed that you're having multiple U.S. aircraft carriers kind of converging on a location, but in a pincer movement. Now, generally, this is a rare occurrence, and generally, this has, in the past, whether it is the first Gulf War, second Gulf War, or in the case of 2008 or whatever, it has actually preceded a significant volatility in prices. So, from that perspective, we took the very unusual call of securing raw material. We chose to buy it at every dip. You can appreciate that this was a risky move in the beginning of quarter four, which is a few months away from the end of a financial year. So, we targeted to buy in every dip. So, we actually entered the end of Feb and Q1 with a much higher stock of critical feedstock, whether it was on high seas or whether it was with local suppliers, products such as benzene, products such as xylenes and tolvines and all that. We ended up with a much larger inventory than we would traditionally have had in Q4. So this was because we saw an unusual movement, and we did not actually anticipate a hot war, but we did anticipate volatility. And that position has held out quite well for us, whether it is in Q4 or in subsequent quarters. Going with this perspective, we anticipate that the company has a reasonable inventory of feedstock at enviable prices until we see it rising, perhaps at the end, maybe Q2 or maybe halfway to Q2.

Perfect, sir. Perfect. And so, can we assume that with this kind of raw materials, what we have secured in Q4, some benefit would have come in Q4, but most of this should come in Q1, impacting positively our standalone numbers?

I can say that our Q1 looks on track for numbers which are better than Q4, whether it is on standalone or on consolidated basis. So, we anticipate Q1 be better than Q4, which is, of course, better than Q3.

And sir, in terms of the products what we have in the domestic market like DASDA, which was under pressure for, I think we also fired anti-dumping duties and on the sodium nitride, which also you have updated last quarter regarding the U.S. tariffs, plus the NT chain, I think, which is also now looking better in terms of its application in the agrochemicals. So, in terms of, apart from the stuff what we have mentioned, is there any green shoots in any of the products what I just mentioned on where we can see some improved performance also coming in FY27 for us?

There are some green shoots, and I will resort to once again mentioning Safe Harbor here. But what has happened also, which was actually announced in December 2025, is that China will administer significant constraints on certain key chemistries, including production, storage, and transportation. So there, we find that there will be some uptick in the demand as well as the profitability for nitration products. Some of the products that you've mentioned are linked to the nitration chain, where Deepak continues to have a significant global market share. So we anticipate that these will have a bit of a tailwind. Now, meanwhile, there is also some degree of a headwind, but it is a global headwind, not limited to India or Deepak, which is in the sulfur downstream. So whether it is the availability of sulfur, the price of sulfuric acid, SO2, oleum, etc., those are places where there will be a heightened cost. But like I said, the important thing is to check what the delta between international prices and Indian prices are. And there, if we are able to buy as we par for the course, we anticipate no significant net impact to the company. And the benefit as it comes from nitration chemistry is which Deepak has a considerable market position as well as a technological strength.

Last question from my side. So in terms of the Phenotics business, like we have already alluded to confidence in terms of the improved performance in Q1. So is it because our IPA business should do well in Q1, given the kind of the competitor who produces IPA through a property route and we do an efficient route, where property inevitability currently is a challenge for So, if you can share your thoughts here with respect to AIP and also if you can share the production numbers for phenol for FY26, that would be very helpful. Thank you so much.

Well, thanks, Nirav. I appreciate the questions, but I continue with my position of not going into details on production numbers. What I can say is that whatever is the Indian requirement for IPA isopropyl nitrite and dipak finolexin, that continues to remain the largest capacity which is able to service the market for all the specifications, Specifications including pharmacological grade. So, from the perspective of our ability to supply, that remains unconstrained. From the perspective of saying what are the margins, frankly, we look at it only on the perspective of an integrated margin approach because our assets are cost competitive. Our product quality is of the best nature. And finally, how much we make will be a balance of what the margins are in terms of the intermediate as the FGs. As I also mentioned, we will also be looking in the next couple of months at producing MIBK and MIBC. So we expect to have a good, healthy mix of downstream as well as upstream.

Got it, sir. Perfect. Thank you so much, and wish you all the best.

Thank you, Neera.

Thank you. The next question comes from the line of Arun Prasad with Avengers Park. Please go ahead. Good evening. Thanks for the opportunity.

My first question is on now. It's going to be on general spread.

Sorry, there is a lot of background noise coming from your line.

Hopefully, now this is better.

Yeah, please go ahead.

Yeah, so I was asking about phenol spreads. Typically, phenol is a very well-traded commodity across the high seas. So, when we are seeing differentials between, say, China and India, this could be either because of the local days in China stocking, restocking, or, say, a phenol is not to be transported because of the safe container issues. So, that is the reason they are saying, should we expect this to get back to the normalcy post the crisis, or are you seeing this kind of triggering some kind of a chain reaction where, you know, this could put the phenol in the thought of cyclical recovery?

Okay. So, Arun, it's not possible for me to comment on the spreads of other companies in other countries. What I can say is that Deepak continues to operate with a high degree of productivity efficiency and is able to ensure that it is able to create the margin that you are seeing. And I've also already qualified that we anticipate that Q1 will be somewhat better than Q4 and also be better than last year's Q1. So, keeping that in mind, there's a lot of factors at play. Even though we're seeing that plant capacities all over the world are being constrained because of their own operating costs, we are also at the same time seeing volatility in currency in freight times and freight costs and material movement from port to port. So, in all of these cases, all I can say is that having a domestic supplier of high-quality products is a game-changer for domestic consumers who don't need to be blocking in the kind of working capital that they would need to if they were importing with the kind of geopolitical risks that they are seeing. So, at this time, I can confidently say that Deepak being a domestic supplier is something that our customers depend on to be able to aggressively work on their downstream expansion activities.

Understood. One follow-up to that question is that do you see domestic buyers, especially in the phenol market, Is it back to ordering at the regular intervals, or they are still resorting to the need-based buying?

So, the answer to this question, to be honest, Sarun, is mixed. In a lot of cases, it has kind of resorted back to a normalized buying availability of just about the demand-supply-sharing environment. So, what is important for them is to know that Deepak is always there, always ready, and always able. So, see, it's one thing that they just never need to worry about. That gives them a lot of succor and that allows them to park their work capital needed most.

Understood. My second question is on the status of, you know, where we are in terms of nitrogen and the second hydrogenation plant. Is the plant ramping up well and running as per the level of utilization that we thought of initially? And second, on your answer to the nitric acid utilization of 45 percentage, is this the average one or this is the exit utilization at which we are currently operating?

So on your first question on nitration and hydrogenation, those plants are already commissioned and they are operating with the right productivity and efficiency as expected. With regards to nitric acid, what we had as a situation is when we were operating, we were operating at full utilization. But as I mentioned, we did engage, we did encounter technical challenges due to which the plant has been under repair and maintenance in line with our technology and ecosystem.

So, on the nitration and nitrification, any way you can quantify where we are in terms of utilization?

So, those plants are fully operational. They've been commissioned at the end of Q&A. So, those are okay. There is a positive contribution. And if there is a constraint, it has been with regards to the availability of nitric acid. The prices have been substantially higher, where we have been constrained to buy from the market because of the technical challenges. The plants are all in line and operational.

Polycarbonate, we have mentioned that the commissioning target of 2028, this is only pertaining to PC resin or to the entire phenol and BPA production block as well?

So, what I've mentioned, which Mr. Badi has also clarified, is that the answer is, at this moment, the same for the integrated. However, we've clarified that the PC resin plant, independently, it may happen alongside, it may happen with a mismatch of a few months, and the phenol expansion will happen in line with the commissioning of the propylene supply. So, our CAPEX includes the ability to have this in a slightly disjointed manner. What we are anticipating is that perhaps they will all happen on track. Perhaps there will be maybe a quarter or so of mismatch. But all of the assets that we put in place, as they are operationalized, they should be able to run at a high degree of plant productivity. In line with that, we have already been working to see how we can start compounding and supplying our polycarbonate compounds to customers in India, as well as outside of India. So, we anticipate that to also reach its capacity in line with our resin plant.

Malik, on the compounding plant…

Sorry to interrupt. Arun, sir, may we request you to return to the question queue for the follow-up questions, because there are several participants. Thank you so much, sir. Your next question comes from the line of Tushar Ragate with Omega Portfolio Advisors. Please go ahead.

Yeah, sir, I just wanted to know the receivable days have increased. Any specific reason to that? Sorry, sorry. I just wanted to know the receivable days has increased. Just wanted to know a specific reason to that. And secondly, sir, in the advanced instrumented business, like, do you see a major growth in that for, you know, FI 20, So,

what you are seeing is underutilized is actually the realization which had gone down, not the capacity had gone down. Capacity, we are running full, but it was the realization which was lower as compared to earlier years. And as regards the outstanding number of days, in some cases, we have changed the model because today we are passing through a very volatile situation and we do not want to risk our outstanding. We have gone into dealership and CSA model, so that is helping us in at least securing our outstanding. So these are the reasons for this.

I will also share the new products that we are picking up, whether it is in Chemtech or in Deepak Nitride, the new downstream products which are in the AgCAM space and outside of the AgCAM space also. So, they're all significantly margin-effective. You can see in FY27, certainly an improved margin profile on even the standalone business as compared to FY26. And we are working towards a return to what we considered normalcy a couple of years ago. So, FI-27 will be this period where you will see an improving trend.

Thank you, sir. Due to the anti-involution stand of China, do you see any realization improvement in standalone businesses?

Like I said, whether it is because of the anti-involution stand or critical hazardous chemistries, etc., or the global demand improvement, Whatever you want to call it, we do anticipate an improvement in the margins as well as the gross numbers as we progress into FY27. That is on the basis of existing product portfolio as well as new products.

Sir, one of the players in India providing intermediate to the global plan, they said that in the hydrochemicals, the volumes are increasing but the prices are not in the favor. Do you see the same happening in your agricultural part of the business?

This is, again, very nuanced, and it depends on the chemicals, it depends on the feedstock availability, it depends on the margin profiles. So, generally, what we are witnessing is that the benefit will be unevenly distributed between integrated players and non-integrated players. So, players who have occupied a large number of positions on the supply chain will be able to benefit from this improvement in the volume and with a general degree of de-risking in the margin portfolio.

Thank you.

Thank you.

Thank you. The next question comes from the line of Rohit Nagraj with 361 Capital. Please go ahead.

Thanks for the opportunity. The first question is on the phenolist part of the business. So, after the maintenance over the last one month or so, are we operating at optimal utilization of the plant?

Just to clarify, the maintenance was only in the beginning of April, maybe for about 10 days or so, not for the month of April. And we are operating at this moment at high efficiency. So, we do not anticipate a constraint from plant or from feedstock availability.

Sure. And the second question is in terms of, so we have said that we have certain low-cost raw material. So, have we passed on the entire pricing increase which has been witnessed in the market? So, whether the prices have been adjusted to the current RM prices? And a light question to that. Given that the final product prices for our advanced intermediate as well as the knowledge business don't have increased, have we witnessed any demand side contraction in the industry for exports markets? Thank you.

Okay. Thanks, Rohit. So, just to clarify, we were able to secure feedstops on dips, which we did very judiciously. So, going into the end of Q4 and into Q1, we are in a good position. In terms of passing on the price increases equivalent to the market conditions, that is an ongoing exercise. What we do is we balance out that as well as market participation and wallet share. So what we are seeing is that by and large, that has been good work done by the business team, keeping on constant engagement with customers as well as ensuring the plant productivity is at a high degree. Now with regards to demand volume, as you can anticipate, demand volume for our products The callers fluctuate based on availability of other co-products as well as their own production cycles. So keeping that in mind, what I can say is that we continue to have a significant wallet share across the board. So, I don't think that there has been any significant disruption in terms of wallet share. And ensuring that we are engaging with customers, what we're giving them as a good degree of certainty is that Deepak stands there. It is, you know, even if it is at market prices or whatever, they don't need to work hard to, you know, use up their foreign exchange to block import parcels because Deepak is there.

Got that, sir. Thanks a lot for answering all the questions and all the best.

Thank you, Rohit.

Thank you. The next question comes from the line of Archit Joshi with Nuama IE. Please go ahead.

Hi, good evening, Monique. Thanks a lot for the opportunity. So, first question on the phenolics bit, knowing that there's a lot of fluidity, the dynamics are evolving in the global trade, but have we assessed a scenario wherein some of the European capacities or maybe Taiwanese or South Korean capacities are, you know, overshooting their cost curve in a scenario where energy costs are rising, Heat stock prices are rising, and let's say if the situation persists for a fairly bit longer, and knowing that we are in a cost competitive scenario, should we see a position wherein some of these capacities might be ousted from the system? So that would be my first one, Mollie. Thank you.

Thanks, Archan. So, you know, you know, it's like an ocean, So water just flows wherever it can. So while there is a disruption, you will have some capacities going offline, some capacities being idle temporarily, some capacities being taken down for maintenance, sometimes in Europe, sometimes in the Far East. In some places like China, you will have commissioning of some capacities, whatever it is. One thing is the fact that India in all of this remains a positive dynamic in terms of growth, in terms of consumption. And they're ensuring that there is availability of products such as phenol is key for our customers. So whether they import it and deal with the kind of volatility that they would face in terms of the amount of time that it takes the exchange gain or loss and the working capital package, what we are focused on seeing right now is our ear to the ground and focusing on optimal plant utilization efficiencies there and ensuring that we are as close to GIT as possible. So, our customers are able to focus on their own expansion activities. So, I see that there is, you know, consolidation also on one side, geopolitical volatility also on the other side. Our job is to be able to exude a sense of stability.

The second one is on the proposed overhauls in China on these migration plants. I believe it was supposed to get triggered on 1st of April. Specifically in the region of, first of May, is it? Okay, okay, I misread that, maybe. But I think this was more specific to the region of Shangong, where I think there's almost 30-35% of migration capacity, and we had seen in the past that, you know, products like DASDA and thus, by far, our OBA portfolio had benefited back in 2019 when there was an explosion. Are we referring to that when you made this comment about certain tailwinds that you might foresee in the migration portfolio? And as such, an action already taken place where some of these Chinese clients who are asked to automate using DCS and all have not done so, and the tailwind is already seen or is prevailing. Thanks, Malik.

Okay, thanks, Arjun. To clarify, my comment was not linked to one or the other province, because this is a general CCP guideline with regards to the chemistry, as well as the safe material movement, as well as the transport, which includes, of course, also product at ports and transport over oceans. So, it is an all-encompassing audit, and it is an all-encompassing compulsion, which is not also limited to only things like DCS. Now, like I said, this is something which can be considered as a tailwind, not specifically linked to A product or B product like DASTA. This is, and again, it is not just nitration, but nitration has been a problem child in China again and again because, you know, a lot of plants operate without safety standards, whether it is at storage or production. Given that, this is a structural tailwind for companies like Deepak, who do it in a responsible manner.

Malik, my only point being is that have you started seeing these developments on ground in China? Irrespective of which province is it, I just wanted to know how are we backing our comment on the stalemate part? Has it already started happening? Is what I wanted to know.

It has already started happening.

All right. All right. That's very helpful, Malik. Thanks and all the best.

Thank you.

Thank you. Before we take the next question, a reminder to all the participants, if you wish to register for a question, please press star and then one. The next question comes from the line of Viti Shah from C.R. Kothari & Sons. Please go ahead.

Regarding the 40-carbonate project, so by when do we expect to commission this and how will you just be funded?

So, we've clarified earlier and we are by and large remaining kind of in line with that that we're expecting it to commission by June 28.

Okay, and what will be the funding for this worth Rs. 5,000 crores?

No, no, funding is, the total project what we announced is around 11,000 crores. The funding is for the entire, all the project together. We have tied up with the banks for debt. It will be in the ratio of 60-40. We have already started putting in equities here. Bank funding is already in line, and once we put in 25% of equity as per the bank condition of 40%, we will start growing from the date. So, funding is not an issue. We are generating enough cash, and bank loans are also tied up, and as and when required, if at all required, we will approach the market.

Okay. That's it for mine. Thank you, sir. Thank you.

Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Thank you so much. Thank you all for joining us on this call. In case any further clarifications are required, you can get in touch with our investor call relationship, Mr. Somseh Kandanda or Mr. Gopal Thakkar. Thank you. Thanks again.

Thank you.

On behalf of Deepak Nitrite, that concludes this conference. Thank you everyone for joining us and you may now disconnect your lines.