Shares of Deepak Nitrite dipped 5 per cent to Rs 1,940 on the BSE in Friday’s firm market after the company’s manufacturing facility in the Nandesari GIDC area in Vadodara caught a massive fire following five chemical blasts on Thursday.
After the accident, the company released a statement saying it was monitoring the situation and that the loss of property was insured.
At 12:38 pm; the stock was trading 3.5 per cent lower at Rs 1,974, as compared to a 0.70 per cent rise in the S&P BSE Sensex. The trading volumes on the counter had jumped over three-fold with a combined 2.7 million equity shares having changed hands on the NSE and BSE.
“An incidence of fire around the warehouse section of the company’s manufacturing site located at Nandesari, district Vadodara, in the state of Gujarat occurred on 2nd June, 2022 at around 6:00 PM,” Deepak Nitrite said in an exchange filing on Thursday.
There has been no coincidence and few people are being given first aid treatment. The company has kept all concerned authorities informed and the plant operations are expected to resume in a day or two upon clearance of damaged warehouse. The cause of fire is being investigated and the company is committed to extend all assistance to the relevant authorities investigating into this matter, it said.
Meanwhile, in the past one month, the stock of the specialty chemical company has underperformed the market by falling 14 per cent as compared to a 1.4 per cent decline in the Sensex. It has corrected 36 per cent from its record high level of Rs 3,020 touched on October 19, 2021.
Analysts at HDFC Securities believe that high input costs will continue to put pressure on the company’s margins and further growth in Deepak Phenolics Limited (DPL) is capped as the phenol plant is already running at full capacity.
Besides, Deepak Nitrite is entering into challenging chemistries vis-à-vis chemistries it is currently operating in. The fluorination and photochlorination chemistries will pave the way to tap agrochemical and pharma customers. However, the company needs to demonstrate its competencies well over the period in these chemistries to seize business opportunities, the brokerage said in its Q4 result update.