Deepak Nitrite Q4 Results Review: Execution Remains The Key; Systematix Maintains 'Hold'

Systematix has increased its valuation to 25x FY27E P/E (from 22x), to acknowledge the structural re-rating potential from Deepak Nitrite's move to higher-value, highermargin polycarbonate business. However, near-term uncertainties surrounding the tariff regime/geopolitical fluctuations and Chinese overcapacity have prompted us to chop EPS by 10% for FY26E/FY27E each..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..Systematix Report.Deepak Nitrite Ltd.’s Q4 FY25 result beat estimates, driven by sharp sequential recovery in the Phenolics segment and overall robust volumes. Consolidated revenue of Rs 21.8 billion (+3% YoY, +15% QoQ) was 11% above our estimate. Gross margin, although flat YoY, expanded by sharp 380bps QoQ to 30.6% (estimate of 30%). Ebitda surged 88% QoQ and 5% YoY to Rs 3.2 billion (50% above estimate), with Ebitda margin expanding 567 bps QoQ and 36 bps YoY to 14.5% on improved operational performance. Deepak Nitrite’s Advanced Intermediates segment revenue fell 3% YoY but rose 19% QoQ to Rs 6.5 billion, although Ebit margin contracted by 1,20bps YoY, but was up 381bps QoQ to 6.9%. Phenolics posted 5%/12% YoY/QoQ revenue growth, with Ebit jumping 16% YoY, causing significant 156 bps YoY expansion in margin to 15.6%, as the company produced higher volumes. Interest expenses soared 112% YoY and 53% QoQ to Rs 93 million. Reported PAT fell 20% YoY but was up 106% QoQ (56% above our estimate of Rs 1.3 bn) to Rs 2.0 bn due to the high base; the company had recorded an exceptional gain of Rs 798 mn in Q4 FY24. Excluding exceptional items, APAT rose 16% YoY. Even though the company has recovered sharply, its major investment pipeline of ~Rs 85 bn into polycarbonate and other downstream products would decide its future trajectory..Click on the attachment to read the full report:.Granules India Q4 Review: Motilal Oswal Maintains 'Buy' Post Inline Results, But Cuts Target Price.DISCLAIMERThis 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.

Deepak Nitrite Q4 Results Review: Execution Remains The Key; Systematix Maintains 'Hold'

Systematix reiterates Hold with a slightly raised target price of Rs 2,217 (Rs 2,179 earlier).

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP