During its post-earnings call, the company’s management reported record volumes across business segments. In the phenols segment, domestic demand remains strong, with minimal challenges in placing volumes from the recently expanded capacity. The company also expects improved spreads in Q1FY26.
In the advanced intermediates segment, volume growth was seen across several sectors, though demand from the agrochemicals space remains muted. Deepak Nitrite is also strategically expanding downstream into products catering to the pharmaceutical, personal care, industrial solvents, and energy sectors.
Projects worth ₹2,200 crore are slated for commissioning in FY26, although some delays have occurred compared to earlier timelines, according to the brokerage’s note.
Nuvama Institutional Equities has retained a ‘Hold’ rating on the stock due to near-term weakness and a lofty valuation. However, it has revised the price target higher to ₹2,073 from ₹1,997 earlier.
The brokerage said that an improvement in Deepak’s sales and profitability is expected to be gradual, in tandem with its pace of capex, the bulk of which is scheduled for FY28E.
On the flip side, Motilal Oswal has downgraded the stock to ‘Sell’ with a price target of ₹1,650, citing expensive valuations for a commodity chemicals company.
Citing underperformance and weak guidance, the brokerage has cut its EBITDA and EPS estimates by 10% and 8%, respectively, for FY26, and by 12% and 11% for FY27.
It expects EBITDAM to stand at 14.9% and 15.6% for FY26 and FY27, respectively. However, the brokerage said that there remains a risk of further downward revisions to these estimates going forward.
Another broking firm Emkay Global has also retained its ‘Reduce’ rating, with unchanged price target of ₹2,000.
Deepak Nitrite shares surged over 6% on Thursday (May 29) after a better-than-expected fourth quarter. Margin expanded 150 basis points while the phenolics business drove revenue growth. The management is also bullish on growth prospects for FY26.
