DEEPAKNTR - Investment Analysis

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

Investment Rating: 3.6

🧪 Fundamental Analysis: Deepak Nitrite Ltd. (DEEPAKNTR)

Deepak Nitrite is a specialty chemicals company with a strong track record in profitability and innovation. However, recent earnings stagnation and valuation concerns suggest a cautious approach for long-term investors.

Metric Value Implication

P/E Ratio 37.4 Slightly overvalued vs. industry PE of 34.4

PEG Ratio -2.71 Negative — indicates earnings contraction or volatility

ROCE / ROE 16.3% / 13.4% Decent — above average, but not exceptional

Dividend Yield 0.40% Low — not attractive for income investors

Debt-to-Equity 0.24 Low — financially sound

EPS ₹51.1 Solid earnings base

Qtr Profit Var +3.35% Mild growth — not high momentum

FII/DII Holding Change +0.04% / -0.61% Mixed sentiment; DII reduction is a concern

📉 Technical Analysis

Current Price: ₹1,865

DMA 50 / DMA 200: ₹1,958 / ₹2,155 → Trading below both; bearish trend

RSI: 31.5 → Near oversold zone; potential bounce

MACD: -20.8 → Bearish crossover; short-term weakness

Volume: Slightly above average — mild interest

💰 Ideal Entry Price Zone

₹1,750–₹1,800

This range aligns with recent support and RSI oversold levels

Avoid entry above ₹2,000 unless earnings growth resumes and PEG improves

📈 Long-Term Investment Outlook

Strengths

Strong brand in specialty chemicals

Low debt — robust balance sheet

Decent ROCE and ROE — efficient operations

EPS base supports valuation if growth returns

Risks

PEG < 0 — poor earnings visibility

P/E > industry average — valuation stretch

RSI and MACD suggest short-term weakness

DII selling — sentiment drag

Deepak Nitrite is a quality cyclical stock with long-term potential if earnings growth revives. It’s suitable for investors who can tolerate volatility and are betting on specialty chemicals demand.

🏁 Exit Strategy / Holding Period

If you already hold DEEPAKNTR

Holding Period: 2–3 years with close monitoring of quarterly results

Exit Strategy

Consider trimming near ₹2,200–₹2,300 if valuation stretches without growth

Reassess if ROCE drops below 12% or PEG remains negative

Hold if earnings growth resumes and margins expand

Would you like a peer comparison with companies like Aarti Industries, Navin Fluorine, or Vinati Organics to explore better growth or valuation dynamics in specialty chemicals?

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