Here in this post we will analyze all about Deepak Nitrite Limited, their fundamentals, future plans, company’s outlook, their financials, shareholding patterns etc , Based on company’s fundamentals and technical analysis, we will try to predict Deepak Nitrite share price target 2023,2024,2025 and 2030.
Deepak Nitrite Share Price Prediction
About Deepak Nitrite
Deepak Nitrite Limited (DNL) is one of the fastest growing chemical intermediates company in India. Company have a diversified portfolio of products that caters to multiple industries with myriad applications. These products are widely used across end-user industries such as pharma, agrochemicals, laminates, paints, etc and serve as raw materials for further processing into various other speciality chemicals or end-user industries.
Deepak Nitrite Share Price Target 2023: Technical Analysis
On technical chart Deepak Nitrite share is trading around its support level which is around Rs 1900, if the share started to trade below this level then we could see the next level of Rs 1700 for short term.
But for long term it would be an opportunity for investor, in upside the first target for short term would be Rs 2300 and second target would be Rs 2600.
Deepak Nitrite Share Price Target 2023
| Year | Deepak Nitrite share price in 2023 |
| 2023 | ₹2300 to ₹2600 |
Company Overview
| Name of the Company | Deepak Nitrite Limited |
| Website | www.godeepak.com |
| Market Cap (Cr.) | ₹ 26,381.14 |
| 52 week High / Low | ₹ 2,690.05/1,682.15 |
| Stock P/E | 28.9 |
| Book Value | ₹ 268 |
| P/B (Price to Book Value) | 7.31 |
| Face Value | ₹ 2.00 |
| ROCE | 44.5% |
| ROE | 37.4% |
| Dividend Yield | 0.36% |
Deepak Nitrite Business Overview
The Company is a leading chemical intermediate company with a diverse product portfolio that encompasses through three Strategic Business Units namely, Basic Intermediates, Fine and Speciality Chemicals, and Performance Products.
Deepak Phenolics Limited (DPL) is a wholly owned subsidiary of the Deepak Nitrite, formed with an intention of seizing the import substitution opportunity in India’s chemical industry. Currently, it manufactures phenol, acetone, and IPA, and has reportedly achieved a more than 50% market share in the country by substituting majority of phenol and acetone imports.
- Basic Intermediates
- Fine & Speciality Chemicals
- Performance Products
- Phenolics
Basic Intermediates:
- The Basic Chemicals (BC) has been renamed as Basic Intermediates (BI).
- Under this category the main products are- Sodium Nitrite, Sodium Nitrate, Nitro Toluidines, Fuel Additives, Nitrosyl Sulphuric Acid.
- User Industries which used basic Intermediates products are Colorants, Rubber chemicals, Explosives, Dyes, Pigments, Food colors, Pharmaceuticals, Petrol & diesel blending and Agrochemicals.
- This segment contributes around 18.20% revenue for Deepak Nitrite total business.
- In FY 2021-22, BI segment registered total revenues of ` 1,261 crores, higher by 66% over the previous year.
Fine & Speciality Chemicals:
- In the Fine & Speciality Chemicals segment (FSC), the Company manufactures specialised products which are customised to client’s specification.
- Company manufactures Speciality Chemicals such as Xylidines, Oximes, and Cumidines, among other products.
- User Industries for Fine & Speciality Chemicals: Agrochemicals, Colours & Pigments, Paper, Personal Care, Pharmaceuticals etc.
- Fine & Speciality Chemicals segment revenue increased by 10% to Rs 846 crores in FY2021-22.
- This segment contributes around 12.22% revenue for Deepak Nitrite total business.
Performance Products
- Deepak Nitrite Performance Products segment is responsible for manufacturing two core products: Optical Brightening Agents (OBA) and DASDA.
- User Industries for Performance Products: Paper, Detergents, Textiles, Coating Applications in Printing and Photographic Paper.
- Performance Products segment reported healthy revenue growth at 74% driven by positive demand trends for key products resulting in a sharp rise in volumes.
- This segment contributes around 7.64% revenue for Deepak Nitrite total business.
Phenolics (DEEPAK PHENOLICS LIMITED):
- Deepak Phenolics Limited (DPL) is a wholly owned subsidiary of Deepak Nitrite Limited. This plant was established in November 2018 at Dahej, Gujarat to produce Cumene, Phenol, Acetone, Isopropyl and Alcohol.
- DPL’s market share in Phenol has expanded to more than 50% inline with favorable demand in India and key export geographies.
- User Industries for Performance Products: Laminate & Plywood, Automotive, Construction, Pharmaceuticals, Adhesives, Sanitisers, Rubber, Chemicals, Paints etc.
- This segment contributes around 61.94% revenue for Deepak Nitrite total business.
- In the Phenolics business, revenues grew by 68% to Rs 4,291 crores in FY 2021-22. While EBITDA Rs 974 crores, translating into EBITDA margin of 23%.
- Isopropyl Alcohol (IPA) contributed 7% to phenolics revenue, with 22% of Acetone consumed captively.
Key Points:
Deepak Nitrite have 6 Manufacturing Plants in India and one in USA.
Outside India, Deepak Nitrite presence is in more than 45 countries.
In India their manufacturing plants are located at Nandesari, Gujarat, Dahej, Gujarat, Dahej, Gujarat (DPL), Roha, Maharashtra, Taloja, Maharashtra and Hyderabad, Telangana.
The Company achieved ROCE of over 30% on a standalone basis for more than 10 consecutive quarters now.
The long-term credit rating of Deepak has improved from AA stable to AA positive by ICRA with a similar improvement for Deepak Phenolics’ long-term credit rating which was upgraded from AA- stable to AA positive.
Industry Outlook and Trends
The global chemical industry is presently valued at about US$5,027 billion, with China accounting for the majority of market share at 39%, followed by the European Union at 15%, and the United States at 13%. India holds a 4% market share in the worldwide chemical market.
The speciality chemicals constitute 22% of the total chemicals and petrochemicals market in India.
The Indian agrochemicals market is expected to register an 8% CAGR to reach US$ 3.7 billion by US$ 4.7 billion by FY 2024-25.
The Government of India is focused on improving chemical industry’s competitiveness and manufacturing share in the overall economy.
Its FY 2033-34 vision for the chemicals and petrochemicals sector emphasises on ways to enhance domestic output, reduce import dependency and promote investment.
It also overhauls the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) policy to encourage investment of ₹ 20 trillion by FY 2034-35.
Government of India identifies the Chemical industry as a key growth driver, with this sector expected to account for 25% of GDP in manufacturing by 2025.
Under the Union Budget 2022-23, the Government has allocated Rs 209 crore (US$ 27.43 million) to the Department of Chemicals and Petrochemicals.
Domestic Chemical Industry
The Indian chemical industry stood at US$ 213 billion in FY21, and is expected to reach US$ 304 billion by FY 2024-25 registering a CAGR of 9.3% from FY 2018-19 to FY 2024-25. To achieve this, an investment of ` 8 lakh crores is estimated in the Indian chemicals and petrochemicals sector by 2025. (Source: IBEF)
According to CRISIL, the Indian Speciality chemicals industry will outpace its Chinese counterpart and double its share of the global market to ~6% by 2026.
MANAGEMENT OUTLOOK
Over the next 2-3 years, the business plans to invest ~` 15 billion in new downstream products and sophisticated chemistry platforms as a part of its next phase of expansion, thus elevating itself towards path of solvents major in the world.
Given the rising demand from the laminates and plywood industry, we believe phenol consumption in India is likely to grow in double digits over near to medium term.
With India’s largest phenol-acetone plant, we will continue to accrue benefits from the country’s growing demand and import substitutions. The long-term prospects remain strong and intact.
We aim to add high-value solvents, which are backward integrated and have set aside ₹ 700 Crores for capital expenditure, which is expected to be completed by FY 2023-24. Life sciences, paints and coatings, among other industries, will greatly benefit from these products.
Performance of Deepak Nitrite in FY2022
The company have achieved record levels of sales and earnings as a result of improved plant performance and customer engagement.
In FY22, on a high note, with consolidated revenue increased by 56% on a year-on-year basis accompanied by 37% year-on-year growth in PAT.
Deepak Phenolics delivered Revenue of ₹ 4,291 Crores (growth of 68%) and EBITDA of ₹ 974 Crores.
Pros:
- Company has reduced debt.
- Company is almost debt free.
- Company has delivered good profit growth of 87.0% CAGR over last 5 years
- Company has a good return on equity (ROE) track record: 3 Years ROE 40.1%
Cons:
- Stock is trading at 7.31 times its book value
Deepak Nitrite Share Price Target 2024-2025
Deepak Nitrite Share Price Target 2024
| Year | Deepak Nitrite share price in 2024 |
| 2024 | ₹2900 to ₹3400 |
Deepak Nitrite Share Price Target 2025
| Year | Deepak Nitrite share price in 2025 |
| 2025 | ₹4000 to ₹4400 |
Deepak Nitrite Subsidiary/Associate Companies:
Deepak Phenolics Limited:
Deepak Phenolics Limited, a wholly owned subsidiary, It mainly produces Phenol, Acetone and their downstream products.
Phenol and Acetone are manufactured at DPL’s state-of-the-art facility in Dahej, Gujarat.
DPL’s Revenue from operations came in at ₹ 4,303.42 Crores and Profit After Tax stood at ₹ 624.36 Crores as of March 31, 2022.
Deepak Nitrite Corporation Inc. (USA):
Deepak Nitrite Corporation Inc. (DNC) is a wholly owned subsidiary based in the United States. This Company was formed to support the Company’s marketing needs in North and South America. DNC’s Total Revenue stood at USD 19,490, with a net income of USD 509 during FY 2021-22.
Deepak Chem Tech Limited (formerly known as Deepak Clean Tech Limited):
Deepak Nitrite has incorporated a wholly owned subsidiary company viz. Deepak Chem Tech Limited (DCTL). This subsidiary was incorporated to carry out business of manufacturing of chemical intermediates and is yet to start production. During FY 2021-22, DCTL’s Total Income stood at ₹ 1,27,481 and the Net Loss was ₹ 2,60,79,323.
Deepak Nitrite Shareholding Patterns:
| Holdings | Year 2022(Sept)% |
| Promoters | 45.71 |
| FIIS | 8.45 |
| DIIS | 12.01 |
| Public | 33.82 |
Deepak Nitrite Share Price Target 2030:
| Year | Deepak Nitrite share price in 2030 |
| 2030 | ₹11500 to ₹12800 |
Conclusion:
Overall Deepak Nitrite is a strong fundamental based company, from last few years company have created an outstanding wealth for their investor. Company have strong portfolio of their products. In coming future we are expecting a phenomenal growth in the company.
Here is the end of the post Deepak Nitrite share price target 2023, 2024, 2025-2030, hope we provided some value, please share your views below in comment section.
Source: Deepak Nitrite Annual Report
Nirmal is a NISM Certified Derivative Trader & the Founder of InvestandEarn.net (Financial Blog). He entered the world of Equity research to explore his interests in financial markets having 5+ Years of Experience in Share Market Trading & Investing. Nirmal frequently writes about Share Market Trading & Investment and publishes his personal view on the market. Drop him a mail at nirmal.jaysval@investandearn.net.
