Deepak Nitrite Q1 Review — Systematix Maintains 'Hold' On Limited Near-Term Catalysts, Structural Margin Risks
Deepak Nitrite reported a challenging start to FY26; key metrics missed estimates during Q1 FY26 due to cyclical headwinds. Consolidated revenue at Rs 18.9 billion was down 13% YoY and QoQ each, impacted by persistent pricing pressure because of oversupply from China and slower-than-expected recovery in the global agrochemicals market.
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Systematix Report
We have cut FY26E/FY27E revenue by ~5.4%/8.6% owing to softness in AI and overall weak Q1 performance. EPS has been cut by 3.2%/8.5% for FY26E/FY27E, with higher depreciation/interest costs further pressuring PAT.
We have trimmed our target price to Rs 2,028 (from Rs 2,217) and value the stock at 25x FY27E P/E (unchanged). With limited near-term catalysts and structural margin risks, we reiterate Hold.
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