Message from Executive Director & CEO-DNL

DEAR SHAREHOLDERS,

It is with a deep sense of purpose, pride, and responsibility that I present to you the performance of Deepak Nitrite Limited for FY 2024-25. This year was defined by global complexities and evolving macroeconomic conditions, though for us, it also presented an opportunity for introspection and consolidation. We have navigated challenges with agility and have built upon our strong foundation to further reinforce our position as one of India’s most admired chemical companies.

In the global context, the continuing trade tensions between the United States and China have profoundly reshaped the global chemical industry. US tariffs on Chinese imports have caused significant supply chain disruptions, leading to higher costs and market fragmentation. This has negatively impacted overall global efficiency within the chemical sector. For India, these shifts in the global chemical landscape create both challenges and opportunities.

This phase of Deepak’s journey reflects its enduring commitment to building a future-ready enterprise, one that leads with purpose, acts with integrity, and delivers value that is sustainable, inclusive, and far-reaching. Our performance this year demonstrates that progress is not measured solely by financial metrics, but also by how well we adapt, innovate, and stay true to our mission.

In a significant development, Deepak Group, through its subsidiary Deepak Chem Tech Limited (DCTL), has announced to undertake project to manufacture polycarbonate (PC) resins with an initial annual capacity of 1,65,000 metric tonnes (MT). DCTL has partnered with affiliates of Trinseo PLC Trinseo for this venture, and we are actively working to complete the entire value chain. PC is amongst the most versatile engineering polymer finding extensive applications in the automotive segment including electric mobility, electronics & electrical, construction, appliances, medical devices, and other sunrise sectors such as aerospace, aviation, drones etc. Local availability of PC will be essential for growing India’s manufacturing base. Domestic production, along with CALIBRE™ trademark’s credibility will support an accelerated approval cycle for new and existing consumers in India where annual imports already account for more than 2,40,000 MT.

Trinseo is a major manufacturer of engineering polymers and compounds with reported net sales of approximately $3.7 billion in 2023. Its engineering compound portfolio finds application with global, marque brands across industries.

We have forayed into manufacturing of engineering polymers at our state-of-the-art polycarbonate compounding plant at Manjusar, Savli in our subsidiary Deepak Advanced Materials Limited.

CATALYZING INDIA’S INDUSTRIAL SELF-RELIANCE: DEEPAK NITRITE’S STRATEGIC MANUFACTURING PUSH

India stands at a pivotal moment — a time when building domestic manufacturing capabilities is not just desirable, but essential. At Deepak Nitrite, we see this as an opportunity to lead from the front. Our vision is clear: to substitute imports with world-class, homegrown chemical manufacturing that powers the nation’s next phase of industrial growth.

Through focused investments in engineering plastics like polycarbonate and critical such as phenol, acetone, and isopropyl alcohol (IPA), we are reducing India’s reliance on foreign supply chains while supporting its emerging industries.

We are committing around ₹ 10,000 Crores over the next 4–5 years to build advanced manufacturing facilities, with a strong emphasis on Dahej, Gujarat, a key node in the PCPIR ecosystem. These projects will meet the rising domestic demand in high-impact sectors including electronics, semiconductors, mobility, infrastructure, construction, housing etc., to name a few.

To ensure long-term competitiveness, we have secured strategic feedstock linkages, such as propylene, and are scaling production rapidly through our subsidiary, DCTL.

Our approach is tightly aligned with national programs like ‘Make in India’ and ‘Viksit Bharat’. We are not just expanding capacity, we are building the foundation for a resilient, innovation-driven India that thrives on self-reliance and global excellence.

A COMPANY GUIDED BY PURPOSE

At the heart of Deepak Nitrite’s evolution lies an unwavering commitment: empowering India’s self-reliance in chemicals while transforming into a globally competitive, technologically pioneering enterprise. This purpose has guided every decision, every investment, and every innovation that we have pursued. As a home-grown industry leader, with decades of expertise, we continue to substitute imports with scale, drive process innovation, and establish integrated value chains that support customers, industries, and national priorities alike.

During the year gone by, we accelerated our journey into downstream products, further strengthening our presence in high-value, complex products that form the backbone of critical global applications. With a sharp focus on niche, margin-accretive offerings, we are laying the groundwork for the next era of chemical innovation. Our strategic roadmap is underpinned by key imperatives including building innovation-led growth engines, scaling sustainability across operations, and delivering exceptional customer-centric execution. These pillars are not aspirational, but are deeply embedded in our strategy and operational frameworks.

FINANCIAL RESILIENCE AND DISCIPLINE

Amid a strategic expansion, we have maintained financial discipline. Despite margin pressures due to soft pricing across multiple intermediates, we delivered a resilient performance, underpinned by strong domestic demand and expansion into newer markets. While realizations declined, our total income rose to ₹ 8,366 Crores, reflecting 8% growth over FY 2023-24. Even amidst challenging conditions, we maintained consolidated EBITDA at ₹ 1,176 Crores, this has been possible owing to our focus on process recalibration resulting in record production volumes across key product lines, with volume-driven growth helping us partially offset price erosion and volatile input costs.

OPERATIONAL HIGHLIGHTS: PROGRESS WITH PRECISION

The Advanced Intermediates segment remained a cornerstone of our success and its performance was enabled by our ability to deliver customized, multi-step synthesis solutions to our clients across pharmaceuticals, agrochemicals, and performance chemicals among others. Our backward integration into critical raw materials has ensured supply chain resilience, cost optimization, and greater flexibility in navigating volatile input costs.

We have completed our expansions, and cost improvement initiatives for agrochemicals and dye intermediates. This will yield higher volume at a lower cost for segments where demand is resilient.

Our steadfast focus on product differentiation has enabled the introduction of tailored solutions for customers, further enhancing our value proposition and market relevance. This has allowed us to make inroads into newer geographies and product applications, expanding our global footprint and enhancing customer stickiness. This is in addition to our relentless pursuit of achieving scale in whatever we do.

The Phenolics business, which now accounts for over 70% of consolidated revenue, continued to perform strongly on the volume front, with our plant operating at high capacity utilization throughout the period. However, this segment was not immune to the volatility in global spreads, which impacted pricing and margins. In response, we accelerated our strategic initiatives by introducing new products from existing assets which will have revenue and margin improvement. MIBK, MIBC, acetophenone and other backward & forward integrations are expected to be commissioned shortly. This expansions will broaden our presence in the energy sector and mark our entry into advanced solvents for life science applications.

INVESTING IN FUTURE CAPABILITIES

Our capacity expansion projects at Dahej are progressing and are central to our ambition of becoming a global powerhouse. These investments will significantly strengthen our capabilities in high-value chemistry platforms which are essential building blocks for speciality and performance materials. Our considerable investment plans include upstream, downstream and sunrise segments. We are undertaking projects to manufacture PC resins and PC compounds which are downstream derivatives of the phenol chain.

Alongside tangible capacities, we are undertaking investments in digitalization, automation, and smart manufacturing. By embedding AI, IoT, and real-time analytics into our plants, we are enhancing traceability, responsiveness, and predictive control. These technologies not only drive efficiencies but also elevate safety, sustainability, and scalability. We have formed a Digital Innovation Lab within IT team and innovative business team members. This team identifies use cases and experiment the same on our Private LLM . Presently, we are in the Multi Cloud Environment wherein we have created a Data Lake. This Data Lake can be used in predictive analytics – based on past data, the model will get trained with the trend and give predictions based on regression on demand, price, scenario simulation – Project Planning, Financial Planning & Demand Forecasting, Automation in Projects AI.

Our R&D and process engineering teams remain the catalysts of innovation. With a pipeline of novel products under development and strong in-house design capabilities, we are well-positioned to transition from a manufacturing-led company to a knowledge-driven enterprise. Our upcoming state-of-the-art R&D facility at Savli, Vadodara, will be central to this mission and emphasize sustainability. The facility will prioritise the development of processes and products that minimise environmental impact, aligning with global trends toward greener and more sustainable industrial practices.

SUSTAINABILITY: OUR CORE COMPASS

We see sustainability not as a regulatory requirement, but a strategic necessity. Our environmental initiatives span water recycling, energy optimization, and waste minimization, areas where we have consistently surpassed benchmarks. Our plants now operate with advanced utilities, and we are steadily expanding our reliance on renewable energy and green feedstocks.

We are aligned with global ESG frameworks and continue to enhance disclosures, governance systems, and audit protocols. Climate resilience, circularity, and responsible sourcing are being built into every layer of our supply chain and operations. Our commitment extends beyond compliance; we aim to become a benchmark for sustainable manufacturing within the chemical industry.

PEOPLE, CULTURE, AND LEADERSHIP DEVELOPMENT

Our people remain our most valuable asset. We have continued to invest in creating a culture that encourages innovation, collaboration, and accountability. Through structured leadership programs, digital learning platforms, and performance-linked recognition, we are building a resilient and motivated workforce.

Diversity, equity, and inclusion are not slogans but values that we live by. Our policies ensure equal opportunities, while our wellness and engagement initiatives ensure that employees thrive, both professionally and personally. The Deepak Learning Academy and our digital upskilling initiatives are preparing our teams for tomorrow’s technologies and leadership challenges.

LOOKING FORWARD WITH CONFIDENCE

As we move into FY 2025-26 and beyond, we do so with confidence, clarity, and conviction. Our strong balance sheet, integrated business model, and forward-thinking investments give us the momentum to scale new heights. While global headwinds may continue in the near term, our long-term trajectory remains firmly upward.

Our aspiration is to be more than just a high-performing company, we aim to become a globally respected enterprise, admired for our innovation, ethics, and value creation. Downstream integration, import substitution, technology leadership, and green manufacturing will form the pillars of our next growth chapter.

We will continue to explore new partnerships, deepen R&D collaborations, and expand into high-potential geographies. With disciplined execution, stakeholder trust, and a future-focused vision, we are confident of building a legacy that outlasts business cycles and redefines industry benchmarks.

In closing, I want to thank every one of you – our shareholders, customers, employees, partners, and communities, for your unwavering trust and belief in our journey. Your support inspires us to dream bigger, act bolder, and remain true to our values.

The story of Deepak Nitrite is being unfolded. In many ways, it is only the beginning. And as we move ahead, we do so with renewed energy, sharpened focus, and a shared determination to transform not just our Company, but the very future of Indian speciality chemicals.

Warm regards,