DEEPAKNTR - Investment Analysis: Buy Signal or Bull Trap?
Last Updated Time : 20 Dec 25, 07:05 am
Back to Investment ListInvestment Rating: 2.4
| Stock Code | DEEPAKNTR | Market Cap | 22,729 Cr. | Current Price | 1,666 ₹ | High / Low | 2,665 ₹ |
| Stock P/E | 107 | Book Value | 232 ₹ | Dividend Yield | 0.46 % | ROCE | 10.1 % |
| ROE | 8.22 % | Face Value | 2.00 ₹ | DMA 50 | 1,655 ₹ | DMA 200 | 1,883 ₹ |
| Chg in FII Hold | -0.47 % | Chg in DII Hold | 0.09 % | PAT Qtr | 112 Cr. | PAT Prev Qtr | 30.3 Cr. |
| RSI | 44.9 | MACD | -30.0 | Volume | 2,37,806 | Avg Vol 1Wk | 1,72,093 |
| Low price | 1,513 ₹ | High price | 2,665 ₹ | PEG Ratio | -5.42 | Debt to equity | 0.01 |
| 52w Index | 13.3 % | Qtr Profit Var | -21.5 % | EPS | 15.6 ₹ | Industry PE | 26.6 |
📊 Analysis: DEEPAKNTR shows weak fundamentals for long-term compounding. ROE at 8.22% and ROCE at 10.1% are below ideal thresholds. Valuation is extremely stretched with P/E at 107 compared to industry average of 26.6, while PEG ratio (-5.42) highlights poor growth-adjusted valuation. Dividend yield at 0.46% is modest, and debt-to-equity at 0.01 reflects a nearly debt-free balance sheet. EPS at 15.6 ₹ is low relative to market cap. Technicals show RSI at 44.9 (neutral), MACD negative (-30.0), and price below 200 DMA (1,883 ₹), indicating bearish sentiment. Quarterly PAT dropped from 30.3 Cr. to 112 Cr. but overall profit variance (-21.5%) raises sustainability concerns.
💡 Entry Zone: Safer entry would be in the 1,400–1,550 ₹ range, aligning with valuation comfort and support levels. Current price (1,666 ₹) is above fair entry zone, making risk-reward unattractive at present.
📈 Exit Strategy: If already holding, consider tactical exit near 1,850–1,950 ₹ resistance. Long-term holding is not favorable unless ROE improves above 12–15% and earnings growth stabilizes. Suggested holding period: short to medium term (6–18 months) rather than multi-year compounding.
Positive
- 📌 Debt-to-equity at 0.01 indicates strong balance sheet
- 📌 EPS at 15.6 ₹ shows profitability despite weak margins
- 📌 Dividend yield of 0.46% provides modest shareholder returns
- 📌 PAT rebound from 30.3 Cr. to 112 Cr. in latest quarter
Limitation
- ⚠️ Extremely high valuation: P/E 107 vs industry 26.6
- ⚠️ Weak ROE (8.22%) and ROCE (10.1%) below compounding thresholds
- ⚠️ Negative PEG (-5.42) highlights poor growth outlook
- ⚠️ Price below 200 DMA indicates bearish trend
Company Negative News
- ❌ Profit variance (-21.5%) raises sustainability concerns
- ❌ FII holding decreased (-0.47%)
Company Positive News
- ✅ DII holding increased (+0.09%)
- ✅ Debt-free balance sheet provides financial stability
Industry
- 🏦 Industry PE at 26.6, sector moderately valued
- 🏦 Chemicals sector faces cyclical demand and margin pressures
Conclusion
🔎 DEEPAKNTR is not a strong candidate for long-term investment due to weak ROE/ROCE and stretched valuations. Entry should be avoided at current levels; wait for correction near 1,400–1,550 ₹. Existing holders may exit near resistance zones or hold short-term only. Long-term compounding potential is limited unless profitability metrics improve significantly.
Would you like me to extend this into a peer benchmarking overlay comparing DEEPAKNTR against chemical sector peers like Aarti Industries, Atul Ltd, and SRF to highlight relative valuation comfort zones?
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