Just like Chakravyuha engulfs Abhimanyu in the epic Mahabharata, Deepak Fertilisers & Petrochemicals was also engulfed with a multitude of problems. Two consecutive years of severe drought in rural India impacting fertiliser business, delay in mining owing to regulatory changes impacting its technical ammonia nitrate (TAN) business, shutdown of natural gas supply, a key feedstock, by the government for two years on account of non-existence of a clear policy on allocation of gas to private sector companies, resulted in bunching of receivables and debt on the company’s balance sheet. Not to mention the high volatility of raw material prices from ammonia to natural gas, falling prices of iso propyl alcohol (IPA), the failed takeover of Mangalore Chemicals and a bleeding real estate business.
My Best Pick 2017
Deepak Fertilisers stands to gain from its vertically integrated operations and leadership position in key specialty chemicals
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