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Deepak Fertilisers shares surge 10% on signing of LNG agreement with Norwegian company

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Deepak Fertilisers and Petrochemicals Corporation shares surged 10% to Rs 546 in Tuesday’s intraday trade on BSE after the company entered into a long-term supply agreement for Liquefied Natural Gas (LNG) with Norway-based Equinor.

“With this tie-up, Deepak Fertilisers strengthens its value chain with an attractive long-term LNG contract to solidify its value chain from Gas to Ammonia to various downstream Fertilisers, Industrial Chemicals and Mining Chemicals. This end-to-end tie-up shall establish a strong long-term foundation for all of DFPCL’s product segments,” the company said in an exchange filing.

“This agreement is for annual supplies of up to 0.65 million tonnes over a period of 15 years, beginning 2026. The tie-up provides room for trading some LNG parcels in the growing LNG demands in India as well as accommodating DFPCL’s growing captive needs. The LNG will be delivered to the west coast of India. DFPCL is at an advanced stage of tying up the Regasification Terminal with the Gas pipeline grid connectivity to its plant’s doorstep already in place,” it said.

The LNG agreement also encourages the companies to further collaborate on petrochemical feedstocks and strategic decarbonization pathways in the future.

At 11.01 am, the stock was trading 7.2% higher at Rs 530 on BSE. However, the stock has declined over 17% in the last one year and has fallen nearly 23% year-to-date.“We are very happy to enter into this long-term agreement with Equinor for supply of LNG. This will put on a solid footing Deepak Fertilisers value-chain right from Gas to Ammonia to building block Nitric Acids to downstream Fertilisers, Mining Chemicals and Industrial Chemicals, helping it to absorb Global volatility as well as enhance overall margins. We also look forward to exploring with Equinor, strategic tie-ups in our Chemical Business, as well as carbon footprint reduction initiatives.” said Sailesh C Mehta, Chairman & MD, DFPCL.Technically, the stock’s day RSI (14) is at 22.4. The RSI below 30 is considered oversold and above 70 is overbought, Trendlyne data showed. MACD is at -36.0, which is below its signal and center line, this is a strong bearish indicator. The stock stands higher than the 5-day, and 10-day simple moving averages (SMAs), while lower than 20-day, 50-day, 100-day, 150-day, and 200-day SMAs.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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