Shares Of Deepak Nitrite Hit A Record High

Shares of Deepak Nitrite Ltd. jumped to a record high after an anti-dumping duty on phenol originating from or exported from the European Union and Singapore was extended till June 7, 2021.

The extension shall remain in force unless revoked, superseded or amended earlier, the Finance Ministry said in a gazette notification issued on March 3.

Deepak Nitrite is one of the key producers of phenol and acetone. "We are seeing a good set of opportunities to be able to go downstream in smaller volume, and in higher volume for both phenol and acetone," Maulik Mehta, managing director and chief executive officer, said during a post-earnings call.

The company's phenolics business grew 40% year-on-year during the October-December 2020 period. Deepak Nitrite, during the call, also said it would invest Rs 200-300 crore to expand the capacity of this business.

According to Sunidhi Securities, prices of acetone and phenol have been surging in the international markets. The price of acetone was up 23% month-on-month and averaged at $1,250/MT and reached $1,400/MT by the end of February, the brokerage said in a note. Prices of phenol, too, were up 18% over the preceding month, averaging around $1,150/MT and hitting a high of $1,350/MT by the end of February.

Deepak Nitrite, IIFL said, has multi-product and multi-process plans for growth, which will be executed over the next few years. "Operational excellence, world-scale capabilities and financial prudence will hold it in good stead," IIFL said in a separate note.

Shares of Deepak Nitrite gained as much as 5.6% around noon on Thursday to Rs 1,691.55 apiece. All the seven analysts tracking the company recommend a 'buy', according to Bloomberg data. The stock trades 13% higher than its 12-month consensus price target of Rs 1,447.