Message from Executive Director & CEO-DPL

DEAR INVESTORS AND STAKEHOLDERS,

It is my privilege to present a comprehensive review of the past year and share our roadmap for the upcoming period.

Despite facing challenging global market conditions, we have demonstrated remarkable resilience and unwavering determination. Through targeted and proactive debottlenecking initiatives, we have significantly enhanced plant capacity utilization, setting new benchmarks in asset productivity, production efficiency and energy consumption. Although the market environment was subdued, characterized by tepid demand and persistently high raw material costs. we remained committed to our customers. Our targeted outreach efforts helped us improve market share and drive sharp volume growth.

Looking ahead, we remain cautiously optimistic. The sustained Indian demand growth for our key products and the ongoing shift toward higher value-added offerings positions us well for future growth. While we continue to navigate cyclical troughs, we anticipate a gradual improvement in market dynamics, pulled by demand from Indian consumers.

INDIA’S PHENOL STORY: JUST GETTING STARTED

The growth trajectory of the phenolics segment is anchored in the diverse applications of phenol across multiple industries. Phenol is a vital raw material in the production of phenolic resins, bisphenol-A (BPA, an essential component in manufacturing polycarbonate resin and epoxy resins), caprolactam (an essential component in manufacturing Nylon), and other derivatives.

Demand for phenolic chain products is further supported by its widespread use in paints and coatings, adhesives, pharmaceuticals, laminates, and speciality products. These sectors are experiencing robust expansion, driven by lifestyle changes, favourable demographics, rapid urbanization, infrastructure development, and rising disposable incomes per family.

Regionally, the Asia-Pacific (incl. China) market continues to lead global phenol capacity and consumption, accounting for over 50% of the market share in 2023. This dominance is fuelled by rapid industrialization and economic growth in countries such as China and India in the recent past, which are key drivers of demand across end-use industries.

KEY MARKET DRIVERS AND TRENDS:

• Bisphenol-A (BPA) Demand: The increasing demand for BPA, used in polycarbonate resins and epoxy formulations, remains a primary growth catalyst for the phenol market. This is especially prominent in the automotive, electronics, and packaging sectors.
• Asia-Pacific Dominance: The Asia-Pacific region, led by countries like India and China, continues to dominate global consumption. China has emerged as a center of global capacity addition, with nearly 100% of new builds during the year. India is also expected to be the fastest-growing market, owing to rapid urbanization, infrastructure development, and rising demand for downstream phenol derivatives.
• Continued dependence on Indian market: With Asian (ex-China) producers unable to export their products to China, India emerged as the next best destination, causing competitive pressure amongst these producers to try and gain a larger Indian market access.

DPL’S STRATEGIC ASCENT TOWARDS GROWTH AND PROFITABILITY

In FY 2024-25, Deepak Phenolics Limited (DPL) reaffirmed its leadership in India’s chemical manufacturing landscape, delivering a resilient performance amid a volatile and challenging market environment. The Company recorded an impressive 16% year-on-year revenue growth, driven by robust domestic demand, strategic productivity and operational enhancements, and a sharp focus on cost optimization.

Despite facing short-term headwinds – including a planned maintenance shutdown, DPL sustained high asset utilization and upheld its reputation for operational excellence across its integrated manufacturing facilities.

With a production capacity of 345 KTPA for Phenol, 210 KTPA for Acetone, and 65 KTPA for Isopropyl Alcohol (IPA), DPL continues to be India’s largest and most efficient player in the phenolics segment. The successful completion of a critical maintenance program, coupled with targeted debottlenecking initiatives, unlocked an additional 10% throughput, further strengthening operational resilience.

These advancements, along with efforts to substitute imports with domestic production, strategically position DPL to capitalize on emerging opportunities across key Indian growth sectors such as pharmaceuticals, electronics, automotive, and construction.

By embracing cutting-edge process technologies, enhancing energy efficiency, and adopting digital manufacturing, DPL remains aligned with the Group’s overarching vision of Responsible Chemistry and Sustainable Growth. The Company’s unwavering commitment to quality, safety, and environmental stewardship ensures it not only meets current market demands but also lays a robust foundation for long-term value creation.

FY 2024-25 AT A GLANCE: DPL’S PERFORMANCE AND PROGRESS

Deepak Phenolics continues to act as the growth engine for the Deepak Group. Despite some headwinds caused by planned maintenance and pricing pressures from imported alternatives, the business segment has demonstrated resilience. Our operations have returned to optimal capacity post-shutdown, unlocking additional throughput and improving overall reliability.

Demand for phenol derivatives such as Acetone and IPA remains strong in the domestic market (Y-o-Y growth of 8-10%), supported by steady growth in end-user segments such as pharmaceuticals, construction, and automotive among others. With increasing domestic demand, we will be significantly contributing to India’s self-sufficiency.

Operational excellence remains a core focus, with continued efforts in process optimization, debottlenecking, and digital efficiency tools. These improvements are expected to contribute meaningfully to our performance and profitability over the coming years.

PIONEERING TOMORROW: DPL’S VISION FOR EMERGING OPPORTUNITIES

Looking ahead, Deepak Group is strategically investing in projects that will shape the future of India’s chemical industry. Propylene, one of the key raw materials for the Phenolic Chain of products has been tied up for long-term supply from Petronet LNG Limited, Dahej. Our most ambitious initiative, the Polycarbonate resin project, is expected to significantly reduce India’s reliance on imports for this vital high performance engineering plastic. This fully integrated project, from Phenol to Polycarbonate, will serve a wide spectrum of industries, including electronics, EV battery casings, automotive, medical devices, and durable packaging.

Beyond manufacturing, we are deepening our commitment to sustainability. We are transitioning to alternative renewal fuel sources, expanding water conservation efforts, and improving waste valorization practices across our facilities. Our long-term capex plan is focused not only on volume but also on strategic positioning in future-ready markets like speciality polymers and energy-efficient materials.

We believe in building with purpose – not just to grow, but to lead. Through continued innovation, operational excellence, and a people-centric approach, we aim to shape a stronger, greener, and more self-reliant industrial landscape for India.

Warm regards,