CHARTING OUR PATH: A REFLECTION ON PURPOSE AND PROGRESS

Amidst the dynamic flux of the global economy, where external factors influence internal responses, our adept teams have not just navigated uncertainties but proactively reinforced our fundamental strengths, guided by the insightful perspectives of our valued stakeholders. Acknowledging the substantial investments – financial, temporal and in trust – made by each stakeholder, we are steadfast in showcasing their significance by providing compelling reasons to place trust in the ethos of ‘Depend on Deepak’.

Our focus extends beyond the confines of profit margins; it encompasses the holistic well-being of our employees and the communities in which we operate. Rooted in this ethos are four fundamental pillars, referenced frequently across this annual report:

For our esteemed Shareholders, we have meticulously crafted a strategic roadmap, firmly anchored in our core principles and values. This roadmap serves as our guiding compass, ensuring responsible and sustainable growth, while striking a harmonious balance between resource deployment and robust returns on investment. Our focus remains unwaveringly fixed on cultivating sustainable, high-quality growth, always mindful of future potential and the enduring strategies that will drive our success.

In our interactions with Customers, responsiveness and the leveraging of our deep-seated process expertise are paramount priorities. We aspire to not only meet but exceed expectations, striving to become the preferred partner for our customers. Our commitment to supplying complex chemicals manufactured through safe and sustainable practices is unwavering and we are resolute in aligning our operations seamlessly with environmental, social and governance (ESG) principles.

Within the intricate tapestry of our organisation, our People serve as the lifeblood that propels us forward. Our Human Resources practices are deliberately designed to foster agile and adaptable leaders, equipped with the tools and principles to build teams characterised by action and integrity. We place a premium on proactive engagement and we champion a culture that values ethical decision-making over entrenched hierarchical structures.

Lastly, in our engagement with the broader Community, we aspire to be agents of positive change. Beyond merely existing within the communities we serve, we endeavour to make a tangible and lasting impact. Whether through philanthropic initiatives, environmental stewardship, or community outreach programmes, our goal is to contribute meaningfully to the betterment of society, ensuring that our presence leaves a lasting legacy of progress and prosperity.

As we reflect on our achievements and aspirations outlined in this annual report, we celebrate not only the milestones we have reached but also the enduring relationships we have cultivated and the transformative impact we continue to make. With resilience, purpose and an unwavering commitment to excellence, we stand poised to navigate the ever evolving landscape with confidence and determination.

STRATEGIC GAINS AND FINANCIAL RESILIENCE IN FY 2023-24

In its consolidated performance for the FY 2023-24, Deepak exhibited resilience, driven by proactive initiatives to debottleneck plants and drive process efficiencies enabling volumetric expansion which was accompanied by significant achievements in specific product categories. This resilience translated into consolidated annual revenues of ₹ 7,682 Crores, underscoring Deepak’s prowess across diverse business realms. Customer-centricity played a pivotal role, as our empowered teams were able to maintain or increase wallet share on strategically important relationships despite multiple headwinds across the macro landscape.

Leading this resilient performance was the Phenolics segment, showcasing robust gains and sustained volume growth attributed to optimal plant utilisation and operational efficiencies. Additional efforts to debottleneck existing facilities further accelerated volume amplification, significantly contributing to our overall momentum. Despite challenging market conditions, our segment’s resilient revenue performance provided further reinforcement, highlighting Deepak’s adaptability amidst market fluctuations.

The FY 2023-24 saw a notable 13% year-on-year surge in production volumes, emphasising Deepak’s ability to expand market presence despite a moderate environment marked by reduced sales prices. The continued stellar performance of the Phenolics segment, driven by enhanced operational efficiency and debottlenecking initiatives, propelled sustained volume expansion.

On the profitability front, Deepak reported an EBITDA of ₹ 1,199 Crores in FY 2023-24, reflecting a 10% decline attributed to prevailing market dynamics which have compressed product realisations. Notably, this figure excludes an exceptional insurance claim of ₹ 80 Crores received during the year. Deepak’s Profit After Tax (PAT) for FY 2023-24 stood at ₹ 811 Crores, inclusive of the insurance claim, underscoring Deepak’s commitment to value creation despite challenges. Elevated plant utilisation and streamlined cost structures further bolstered momentum, particularly in select value-added product segments experiencing stable demand and favourable realisation trends.

Amidst challenging macroeconomic conditions, Deepak’s teams delivered commendable results, symbolising their resilience and adaptability. Recognising this resilient performance, the Board has recommended a dividend of ₹ 7.50 per equity share for the FY 2023-24, representing 375% on a face value of ₹ 2 each, reaffirming confidence in Deepak’s leadership position and unwavering dedication to shareholder prosperity

Deepak Nitrite stands firm in its dedication to a sustainable future, implementing an array of strategies to diminish carbon and water footprints while ingeniously repurposing by-products into valuable resources.

NAVIGATING GROWTH: DEEPAK GROUP’S JOURNEY IN FY 2023-24

In FY 2023-24, Deepak Group witnessed numerous growth initiatives coming to fruition, marking significant milestones across various sectors. These developments underscore the Company’s commitment to enhancing its operational capabilities, strengthening market position and fostering innovation. From commissioning new production assets to strategic acquisitions and collaborations, Deepak Group remains steadfast in its pursuit of sustainable growth and value creation.

EMBRACING SUSTAINABILITY: DEEPAK NITRITE’S GREEN COMMITMENT

Deepak Nitrite stands firm in its dedication to a sustainable future, implementing an array of strategies to diminish carbon and water footprints while ingeniously repurposing by-products into valuable resources. These efforts have garnered prestigious recognition, including accolades such as “The Best Compliant Company for the Codes Under Responsible Care” by the Indian Chemical Council and the esteemed Divya Bhaskar Pride of Gujarat award for “The Most Responsible Company”. As staunch proponents of Responsible Care, Together for Sustainability (TfS) and Nicer Globe, we uphold environmental, health and safety standards with unwavering commitment, championing responsible chemistry and innovative solutions.

Acknowledging the inherent risks associated with production processes, Deepak Nitrite has embraced a heightened role in implementing automation and plant safety standards to ensure a secure work environment and minimise errors. Our relentless pursuit of quality, environmental standards and efficient management of hazardous processes has earned the trust of esteemed global clientele.

Sustainability isn’t just a commitment at Deepak Nitrite; it’s ingrained in our business ethos and decision-making processes. We strive to mitigate our environmental impact by adopting sustainable practices throughout our operations, from reducing greenhouse gas emissions to promoting circular economy principles. Our continual investment in innovative technologies further bolsters resource efficiency, ensuring the delivery of safe and sustainable products to our customers.

Our commitment to community well-being is unwavering, evident in our social initiatives focussed on education, healthcare and empowerment of marginalised communities. Upholding integrity and ethical conduct is fundamental to our corporate governance framework, guiding fair and responsible practices across our operations. We nurture a diverse and inclusive work environment, fostering professional growth and equality among our employees.

Deepak Nitrite remains dedicated to continuous improvement in sustainability performance, setting ambitious goals and monitoring progress diligently. Sustainability isn’t just a goal for us – it’s a fundamental part of our vision for a better tomorrow.

BUILDING RESILIENCE: OUR STRATEGIC SHIFT AND VISIONARY OUTLOOK

Over the past five decades, Deepak Nitrite has consistently delivered unwavering performance and ensured a dependable supply to our customers, regardless of external pressures. In response to recent industry challenges, we’ve proactively implemented tactical initiatives. Firstly, leveraging our robust brand and market position, we prioritised key strategic relationships, driving growth in sales volumes. Secondly, rigorous asset optimisation efforts have led to record production for vital intermediates, enhancing our competitive edge amid abundant supply conditions. Additionally, our focus on process efficiency and cost optimisation has yielded savings, countering margin pressures.

Deepak Nitrite is strategically positioned to capitalise on the ‘Make in India for the World’ initiative. With projects valued at approximately ₹ 25 Billion across core product lines, we’re committed to sustained growth and value enhancement. Leveraging our extensive manufacturing infrastructure and chemical expertise, we’ve emerged as a crucial partner for major domestic and global players. Our future initiatives include expanding capacity, backward integration and establishing new platforms to meet evolving market demands. Despite challenges such as destocking in China, we foresee a gradual easing, supported by India’s favourable manufacturing environment.

Driven by our commitment to operational excellence and asset utilisation, we’ve set new production standards in critical intermediates. India’s burgeoning economy offers global opportunities for the chemical industry and Deepak Nitrite aims to play a pivotal role in shaping this ecosystem. Targeted investments in downstream segments, operational efficiency and speciality chemicals are poised to unlock growth, value and sustainability, aligning seamlessly with our strategic vision for future success.

Lastly, I want to express my deep gratitude to all our investors and stakeholders for their continuous dedication and confidence. Your unwavering support is fundamental to our progress, inspiring us to pursue excellence consistently.