DEEPAKFERT - Investment Analysis: Buy Signal or Bull Trap?
Last Updated Time : 20 Dec 25, 07:05 am
Back to Investment ListInvestment Rating: 2.8
| Stock Code | DEEPAKFERT | Market Cap | 15,291 Cr. | Current Price | 1,211 ₹ | High / Low | 1,779 ₹ |
| Stock P/E | 40.4 | Book Value | 274 ₹ | Dividend Yield | 0.84 % | ROCE | 14.9 % |
| ROE | 12.3 % | Face Value | 10.0 ₹ | DMA 50 | 1,362 ₹ | DMA 200 | 1,366 ₹ |
| Chg in FII Hold | -0.31 % | Chg in DII Hold | 0.34 % | PAT Qtr | 50.0 Cr. | PAT Prev Qtr | 86.8 Cr. |
| RSI | 27.4 | MACD | -55.5 | Volume | 1,60,959 | Avg Vol 1Wk | 1,87,464 |
| Low price | 888 ₹ | High price | 1,779 ₹ | PEG Ratio | 1.43 | Debt to equity | 0.13 |
| 52w Index | 36.3 % | Qtr Profit Var | -50.0 % | EPS | 30.0 ₹ | Industry PE | 20.0 |
📊 Analysis: DEEPAKFERT shows moderate fundamentals with ROE at 12.3% and ROCE at 14.9%, which are below ideal compounding thresholds. Valuation is stretched with P/E at 40.4 compared to industry average of 20.0, though PEG ratio at 1.43 suggests growth-adjusted valuation is somewhat reasonable. Dividend yield at 0.84% provides modest shareholder returns, and debt-to-equity at 0.13 indicates manageable leverage. EPS at 30.0 ₹ is decent, but quarterly PAT dropped significantly (-50%), raising concerns about earnings stability. Technicals show RSI at 27.4 (oversold), MACD negative (-55.5), and price below both 50 DMA (1,362 ₹) and 200 DMA (1,366 ₹), indicating bearish momentum.
💡 Entry Zone: Ideal entry would be in the 950–1,050 ₹ range, closer to valuation comfort and support levels. Current price (1,211 ₹) is above fair entry zone, making risk-reward unattractive at present.
📈 Exit Strategy: If already holding, consider tactical exit near 1,350–1,400 ₹ resistance. Long-term holding is not favorable unless ROE improves above 15% and earnings growth stabilizes. Suggested holding period: short to medium term (6–18 months) rather than multi-year compounding.
Positive
- 📌 EPS at 30.0 ₹ reflects reasonable profitability
- 📌 PEG ratio at 1.43 indicates fair growth-adjusted valuation
- 📌 Debt-to-equity at 0.13 shows manageable leverage
- 📌 Dividend yield of 0.84% provides modest returns
Limitation
- ⚠️ Weak ROE (12.3%) and ROCE (14.9%) below compounding thresholds
- ⚠️ Valuation premium: P/E 40.4 vs industry 20.0
- ⚠️ Quarterly PAT decline (-50%) raises sustainability concerns
- ⚠️ RSI at 27.4 indicates oversold momentum but bearish trend persists
Company Negative News
- ❌ PAT dropped from 86.8 Cr. to 50.0 Cr.
- ❌ FII holding decreased (-0.31%)
Company Positive News
- ✅ DII holding increased (+0.34%)
- ✅ Debt levels remain low, ensuring financial stability
Industry
- 🏦 Industry PE at 20.0, sector moderately valued
- 🏦 Fertilizer and chemicals sector faces cyclical demand and margin pressures
Conclusion
🔎 DEEPAKFERT is moderately attractive for tactical investment but lacks strong long-term compounding potential. Entry near 950–1,050 ₹ offers margin of safety. Existing holders can maintain positions for 6–18 months, targeting exits near 1,350–1,400 ₹ unless profitability improves. Long-term holding is not recommended without significant improvement in ROE, ROCE, and earnings stability.
Would you like me to extend this into a peer benchmarking overlay comparing DEEPAKFERT against fertilizer sector peers like Chambal Fertilisers, GNFC, and Coromandel International to highlight relative valuation comfort zones?
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