Deepak Nitrite: Motilal Oswal Maintains 'Neutral' Stance On The Stock — Here's Why

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

Motilal Oswal Report

Deepak Nitrite Ltd. aims to become the largest player in the solvent market by focusing on import substitution. It is foraying into Polycarbonate (PC, 165ktpa), Methyl Isobutyl Ketone (MIBK, 40 ktpa), Methyl Isobutyl Carbinol (MIBC, 8ktpa), and Sodium Nitrite/ Nitrate, among other products. These products are taking shape and are likely to be commissioned in FY26.

Some other previously announced capex projects have already been commissioned (fluorination plant, specialty salts unit).

Deepak Nitrite is aggressively pursuing both backward and forward integration projects to de-risk its business model and expand its product portfolio. However, its entire product portfolio consists of commodities. The stock trades at ~29x FY26E earnings per share of Rs 66.2 and ~19x FY26E EV/Ebitda, which we believe is expensive for a commodity chemical company.

We reiterate our Neutral rating on the stock with a target price of Rs 1,835 (premised on 25x FY27E EPS).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.