DEEPAKFERT - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.0

🌾 Fundamental Analysis: Deepak Fertilisers and Petrochemicals Corp. Ltd. (DEEPAKFERT)

Deepak Fertilisers is a diversified chemicals and fertilisers company with strong earnings, improving margins, and decent capital efficiency. While valuation is reasonable, the PEG ratio and debt levels suggest a balanced approach for long-term investors.

Metric Value Implication

P/E Ratio 20.7 Undervalued vs. industry PE of 27.2 — attractive entry point

PEG Ratio 1.76 Slightly high — growth priced in; not cheap

ROCE / ROE 16.0% / 16.0% Solid — efficient capital deployment

Dividend Yield 0.53% Low — not ideal for income investors

Debt-to-Equity 0.67 Moderate — needs monitoring

EPS ₹77.7 Strong earnings base

Qtr Profit Var +24.4% Good growth momentum

FII/DII Holding Change +0.52% / +0.94% Strong institutional interest — bullish signal

📉 Technical Analysis

Current Price: ₹1,607

DMA 50 / DMA 200: ₹1,536 / ₹1,285 → Trading above both; bullish trend

RSI: 53.2 → Neutral zone; no strong momentum

MACD: +0.86 → Mild bullish crossover

Volume: Significantly above average — strong buying interest

💰 Ideal Entry Price Zone

₹1,500–₹1,550

This range aligns with DMA support and offers a reasonable valuation buffer

Avoid entry above ₹1,700 unless PEG improves and debt reduces

📈 Long-Term Investment Outlook

Strengths

Attractive P/E — undervalued relative to peers

Strong ROE and ROCE — efficient operations

High EPS — solid earnings base

Institutional accumulation — confidence in future growth

Risks

PEG > 1.5 — growth may be priced in

Moderate debt — leverage risk in down cycles

Low dividend yield — not ideal for conservative investors

Sector cyclicality — sensitive to commodity prices and policy

Deepak Fertilisers is a high-quality cyclical growth stock, suitable for long-term investors who can tolerate moderate volatility and are looking for value in the chemicals/agri-input space.

🏁 Exit Strategy / Holding Period

If you already hold DEEPAKFERT

Holding Period: 2–4 years for long-term compounding and sector tailwinds

Exit Strategy

Consider trimming near ₹1,750–₹1,780 (recent high)

Reassess if ROCE drops below 12% or debt-to-equity rises above 0.8

Hold if earnings growth continues and PEG normalizes below 1.5

Would you like a peer comparison with companies like Chambal Fertilisers, Coromandel International, or GNFC to explore better capital efficiency or dividend profiles?

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