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From Commodity To Specialty, Deepak Fertilisers Bets Big On Shift In Business Model

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Deepak Fertilisers and Petrochemicals Corp has taken first steps in a shift from commodities to specialty in its business model — a move its top management is confident will be fruitful results. “We are moving from commodity to specialty in each of our businesses,” Shailesh Mehta, Chairman and Managing Director of Deepak Fertilisers, said an interview to CNBC-TV18

“That we believe is something that is going to give us, not just for this year but also the coming three years, a complete transformative change in terms of business outlook,” he said. 

Deepak Fertiliser shares finished a volatile session three percent lower amid a broad market sell-off on Friday. The stock declined by Rs 27.7 to settle at Rs 891.4 apiece on BSE.

Pune-based Deepak Fertilisers — which deals  in fertilisers, besides agri services, bulk chemicals, mining chemicals and value-added realty — believes chemicals are going to be a predominant segment.

“Instead of us being into the product side of the business, we make a product and just do sales and distribution. We are now moving towards coming much more closer to the final-end consumer looking at the each end-segment, and then looking at what we could do to combine product-plus services in order to make a holistic solution in terms of a total offering. So moving from pure commodity to a specialty,” he said.

In fertilisers, for instance, instead of selling the typical NPK — ferltilisers based on a combination of nitrogen, phosphorus and potassium, the company plans to roll out a series of crop-specific nutrients basis discussions with farmers.

“That is going to be giving us a huge differentiator,” he explained.

Similarly, in mining, instead of focusing on selling just ammonium nitrite, the company is looking at bringing in blasting services and drone-based review systems as a full package. “This will impact the final consumer (and) the mines to improve the mine productivity,” said Mehta.

He said that its three businesses — fertilisers

, industrial chemicals and mining chemicals, are “beautifully aligned with the India growth story. As India grows, it needs power for which it will need coal, it needs limestone for cement for real estate and infrastructure, and all of it requires technical ammonium as a mining chemical.”

Deepak Fertilisers shares have rewarded investors with a phenomenal return of more than 48 percent in the past three months, sharply outperforming the Nifty50 benchmark’s 14 percent gain.

First Published:  IST

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