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Deepak Nitrite Ltd manufactures industrial chemicals. The company’s production capacities are located at Nandesari and Dahej in Gujarat and Taloja in Maharastra. Deepak Nitrite produces a spectrum of chemicals, including agrochemicals, rubber, chemicals for pharmaceutical products, dyes, pigments, specialties and thin chemicals.

Deepak Mehta is the Chairman of the company and his son Maulik Mehta is the CEO. The company’s founder, Chimanlal Kimchand Mehta, was a prominent chemical trader from a Jain family in Gujarat. The company was incorporated in March 1970.

Chemicals Industry in India

•  With the exception of a few dangerous chemicals, India’s chemical industry is de-licensed. India ranks third in Asia and sixth globally in terms of chemical production, which accounts for 7% of the country’s GDP. Currently valued at US$220 billion, the Indian chemical industry is projected to grow to US$300 billion by 2030 and US$1 trillion by 2040. Even in a time of global uncertainty, this industry continues to be a vibrant centre of opportunity.

•   By 2027, the Indian chemical industry is anticipated to expand at a compound annual growth rate (CAGR) of 11–12%, boosting India’s market share from 3% to 4% in the global specialty chemicals market. A CRISIL report predicted that India’s specialty chemicals market would expand more quickly than China’s, rising from 3-4% in fiscal 2021 to 6% by 2026. The report also claims that a recovery in domestic end-user demand and a change in the global supply chain brought about by the China+1 strategy will drive notable revenue growth.

•   In August 2024, petrochemical production reached 1,889.78 million metric tonnes (MMT), while major chemical production reached 978.08 MMT. The following were the levels of production for different chemicals in May 2024: 264.49 MMT for soda ash, 313.23 MMT for caustic soda, 211.38 MMT for liquid chlorine, 29.54 MMT for formaldehyde, and 24 MMT for pesticides and insecticides.

•  With the exception of a few hazardous chemicals, industrial licensing and 100% FDI are permitted in the chemical sector under the automatic route. Between April 2000 and June 2024, foreign direct investment (FDI) inflows totalling US$22.70 billion were made into the chemicals sector (excluding fertilizers). Through research and development as well as programs like lowering the basic customs duty on a number of imported goods and advancing the “Make in India” campaign, the Indian government assists the industry.
•    The government has established a 2034 vision for the chemicals and petrochemicals industry to look for ways to increase domestic production, lower imports, and draw in investments. The Department of Chemicals and Petrochemicals received ` 192.21 crore (US$ 23.13 million) from the government as part of the Interim Budget 2024–2025. Bulk Drug Parks are being promoted through PLI schemes, which have a budget of `1,629 crore (US$ 213.81 million).

Company Perspective and Review

•   From FY20 to FY24, Deepak Nitrite demonstrated solid financial performance and growth. Reserves and surplus have grown significantly, indicating strong profitability and retained earnings. Increased liquidity and a decrease in short-term borrowings point to better financial stability and a stronger cash position. Continued expansion and strategic investments are indicated by growth in investments and fixed assets. Increases in trade receivables and inventories indicate rising sales, but they should be closely watched to guarantee effective working capital management.
•   Deepak Nitrite has grown over the years, fuelled by consistent revenue growth, efficient cost control, and a drop in financing expenses. Going forward, the emphasis should be on controlling the cost of raw materials, preserving operational effectiveness, and making sure that exceptional items don’t have a big impact on profitability. The company has paid continuous dividends.