Deepak Nitrite Share Price

Fundamental analysis of Deepak Nitrite Ltd.

Today, there are many companies that produce various forms of chemicals, such as medicines, cosmetics, etc. Established in 1970, Deepak Nitrite is one such company that decided to enter the chemical sector.

This company caters to different industries and sectors and has come a long way in cementing its position in both domestic and international intermediates markets. In fact, this company has a 70% market share of chemical intermediates in the Indian market!

With the growing demand for chemicals across the globe, this company still has a long way to go, and that will definitely affect the Deepak Nitrite share price in the long run! In this article, we will delve into the fundamental analysis of Deepak Nitrite Ltd. and find out about Deepak Nitrite share price forecast and whether you should invest in it!

Deepak Nitrite Ltd. (DNL)

Deepak Nitrite Ltd.’s journey began in 1970 when Chairman Emeritus Shri CK Mehta laid its foundation stone.

Today, this company has a presence in more than 30 countries spanning across 5 continents! It has an export network that spans over 45 countries, including the USA, Japan, and countries in Europe and Latin America. Headquartered in Vadodara, Gujarat, DNL specialises in manufacturing intermediaries for paints and explosives. Its product portfolio also includes basic, fine, speciality, and performance products.

With over five decades of experience, Deepak Nitrite currently has 5 manufacturing plants which are located in Nandesari, Dahej, Roha, Taloja and Hyderabad. This company also has a few subsidiaries: Deepak Phenolics Ltd., Nova Synthetic Ltd., Deepak Chem-Tech Ltd., and Deepak Nitrite Corporation Inc.

According to Morgan Stanley-backed reports, DNL is set to double its base earnings by 2028, focusing on becoming a prominent phenolics producer in the market. Deepak Nitrite earns 35% of its revenue from exports and has over 100 products that cater to different industries. It also has over 700 customers and 56+ applications that are supported globally!

Is investing in the chemical manufacturing sector worth it?

Investing in chemical stocks can be an excellent option if you are looking for capital appreciation in the long term. These stocks have proven to be quite resilient and have also outperformed many sectors in just the past decade.

India has the sixth-largest sales of chemicals in the world, and it is also the fourth-largest producer of agrochemicals. In addition to being one of the largest consumers in the world, it also has an 11.7% chemical products export share, and speciality chemicals account for 50% of these exports!

According to government data, India’s agrochemical sector is projected to grow at a CAGR of 8-10% until 2025. Considering these predictions and data, the chemical manufacturing sector is likely to experience a boom.

As we discussed earlier, Deepak Nitrite aims to double its base earnings, so it might be an excellent time to track the Deepak Nitrite share price chart and make strategic investment decisions.

Who are Deepak Nitrite’s competitors in the chemical manufacturing industry?

• Tata Chemicals Ltd.
• Vinati Organics Ltd.
• Pidilite Industries Ltd.
• Godrej Industries Ltd.
• Himadri Speciality Chemical Ltd.
• Gujarat Fluorochemicals Ltd.
• Solar Industries India Ltd.

History of Deepak Nitrite Ltd.

Let us take a look at the trajectory of Deepak Nitrite since the time it began its operations!

• Incorporation: Deepak Nitrite Ltd. was established on 06th June 1970 by its Chairman, Late Emeritus Shri CK Mehta.
• Product range: This company manufactures and supplies a large variety of chemicals such as dyes, pigments, fuel additives, agrochemicals, detergents, rubber, personal care products, and chemical intermediaries for explosives.
• Infrastructure: Deepak Nitrite Ltd. has a robust infrastructure covering the products' journey from design to dispatch. It has many environmentally compliant facilities that are adept at handling hazardous chemicals in bulk quantities. Additionally, its phenol plant, backed by KBR, Honeywell, and Thyssen Krupp, has one of the country's lowest thermal footprints.
• Certifications: DNL has an ISO 9001:2015 certificate whose scope covers marketing basic intermediate, fine & speciality chemicals, and performance products. In addition, this company has also been awarded the “ICC Certificate of Merit” because of it being the best compliant company in the Environment, Health and Safety (EHS) category.
• Awards and recognitions: DNL has been honoured with numerous awards and recognitions. It was presented with the “Super Achievers 2017 – Making New India” award in 2017-2018. It was also presented with the “Millennium Alliance Round-4 Innovations Award 2016-17” because of its contribution to securing food in the tribal areas as a part of its community-owned initiatives.

DNL has over 50 years of experience, and with its ambitious and visionary plans, it is all set to become a game-changer in the industry.

Company profile of Deepak Nitrite Ltd.

Pros

• Debt-free. DNL is virtually debt-free, which is an indication of its stable cash flow. Additionally, since it is debt-free, it has much more financial freedom to make new capital investments.
• A healthy interest-coverage ratio. Deepak Nitrite Ltd. has a high-interest coverage ratio of 240.15, indicative of its robust financial health. In addition, it is also less susceptible to fluctuating interest rates.
• Healthy ROE. The company has been maintaining a healthy ROE of 21.40% over the past three years.
• Zero promoter pledge. Since the company has zero promoter pledging, less risk is involved.

Cons

• Decline in net profits. The company has been experiencing a profit growth of -4.9 % over the past three years.
• High P/E ratio. Deepak Nitrite stocks are trading at a high P/E ratio of 74.05, meaning the stock might be overvalued.
• Poor revenue growth. DNL has been experiencing a poor revenue growth of 10.81% over the past three years.

The finances and Deepak Nitrite share price forecast

The table below summarises some of the critical financial data of Deepak Nitrite Ltd. as of June 2024.

The Deepak Nitrite share price target is set to be approximately Rs 2,700 for 2025 as opposed to the Rs 2,300 Deepak Nitrite share price today.

Shareholding pattern of Deepak Nitrite Ltd.

The shareholding pattern of Deepak Nitrite Ltd. has been listed below, taken as of June 2024:

• Promoters: Hold 49.13%
• Foreign Institutional Investors (FII): 6.66%
• Domestic Institutional Investors (DII): 19.33%
• Public: 24.88%

Peer multiple comparison

Let’s take a look at Deepak Nitrite’s peers and evaluate them against some key metrics to understand Deepak Nitrite's performance in the market. The table below depicts data taken as of June 2024.