DEEPAKNTR - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | DEEPAKNTR | Market Cap | 23,720 Cr. | Current Price | 1,738 ₹ | High / Low | 2,129 ₹ |
| Stock P/E | 120 | Book Value | 236 ₹ | Dividend Yield | 0.43 % | ROCE | 7.43 % |
| ROE | 6.23 % | Face Value | 2.00 ₹ | DMA 50 | 1,669 ₹ | DMA 200 | 1,710 ₹ |
| Chg in FII Hold | 0.13 % | Chg in DII Hold | 0.26 % | PAT Qtr | 38.8 Cr. | PAT Prev Qtr | 15.5 Cr. |
| RSI | 51.1 | MACD | 53.9 | Volume | 2,24,779 | Avg Vol 1Wk | 2,90,400 |
| Low price | 1,280 ₹ | High price | 2,129 ₹ | PEG Ratio | -4.89 | Debt to equity | 0.02 |
| 52w Index | 53.9 % | Qtr Profit Var | -28.0 % | EPS | 13.8 ₹ | Industry PE | 29.2 |
📊 Financial Overview: Deepak Nitrite (DEEPAKNTR) shows weak fundamentals relative to valuation. ROE is 6.23% and ROCE is 7.43%, reflecting low efficiency. Debt-to-equity is very low at 0.02, ensuring financial stability. Dividend yield is modest at 0.43%. Quarterly PAT rose from ₹15.5 Cr. to ₹38.8 Cr., but overall profit variation is -28%, highlighting earnings volatility.
💹 Valuation Indicators: Current P/E of 120 is extremely high compared to the industry average of 29.2, suggesting severe overvaluation. P/B ratio is ~7.4 (1738/236), which is expensive. PEG ratio is negative (-4.89), signaling unsustainable growth prospects. Intrinsic value appears much lower than current price, making fresh entry unattractive.
🏢 Business Model & Advantage: Deepak Nitrite operates in chemicals and intermediates, with strengths in phenolics, performance products, and specialty chemicals. Its competitive advantage lies in scale, diversified product portfolio, and established client base. However, profitability pressures and cyclical demand limit financial attractiveness.
📈 Entry Zone: A favorable entry zone lies between ₹1,500–1,600, closer to intrinsic value and support levels. Current price (₹1,738) is above this zone, making staggered accumulation advisable only for long-term investors.
🔒 Long-Term Holding Guidance: Deepak Nitrite is a recognized chemical player, but stretched valuations, weak return ratios, and volatile earnings make it risky. Long-term investors should hold cautiously, monitoring demand cycles and profitability trends.
Positive
- 🌟 Debt-light structure (0.02 debt-to-equity)
- 🌟 Diversified operations across chemicals and intermediates
- 🌟 PAT improved from ₹15.5 Cr. to ₹38.8 Cr.
- 🌟 Institutional interest increased (FII +0.13%, DII +0.26%)
Limitation
- ⚠️ Extremely high P/E (120) vs industry average (29.2)
- ⚠️ Very low ROE (6.23%) and ROCE (7.43%)
- ⚠️ PEG ratio negative (-4.89)
- ⚠️ Dividend yield modest (0.43%)
Company Negative News
- 📉 Profit variation (-28%) despite PAT improvement
- 📉 Earnings volatility due to cyclical demand
Company Positive News
- 📈 PAT improved from ₹15.5 Cr. to ₹38.8 Cr.
- 📈 Institutional interest increased (FII +0.13%, DII +0.26%)
Industry
- 🏦 Industry P/E at 29.2 reflects moderate valuations
- 🏦 Chemical sector supported by industrial demand and specialty product growth
Conclusion
✅ Deepak Nitrite has industry relevance and a debt-light balance sheet, but extremely high valuations, weak return ratios, and volatile earnings make it unattractive at current levels. A better entry zone lies between ₹1,500–1,600. Long-term investors should hold cautiously, awaiting valuation corrections and stable profitability.
Would you like me to also prepare a chemical sector outlook to evaluate how demand cycles and specialty product growth could influence Deepak Nitrite’s long-term trajectory?