Deepak Nitrite Ltd. share price target

Deepak Nitrite (DN) reported a weak operating performance, with EBITDA declining 31% YoY to INR2b in 2QFY26. Gross margin contracted 440bp YoY to 27.6% and EBITDA margin contracted 390bp, driven by macro headwinds, pricing trends, and tariff developments.

Deepak Nitrate’s Q1FY26 EBITDA at Rs1.7bn (down 44% YoY; up 11% QoQ) was in line with our estimate, albeit below consensus estimate.

Deepak Nitrite (DN) reported a muted operating performance in 1QFY26, as EBITDA declined by 39% YoY to INR1.9b.

Deepak Nitrite’s (DN) Q1FY26 has shown marginal improvement over adj. Q4FY25 EBITDA; however, overall performance remains subdued.

Following the recent price correction, we upgrade the stock to HOLD' with a revised target price of Rs1,883, valuing it at 32x FY27E EPS. DN's Q1FY26 adjusted revenue stood at Rs18.7bn, declining to 13.6% YoY and 7% QoQ. Operating performance was impacted by ongoing pricing pressure, oversupply from China, and a decline in spreads. The Advanced Intermediates segment witnessed stable volumes across most products, except agrochemical intermediates, which were affected. The Phenols segment reported steady...

Deepak Nitrite’s (DN) Q4FY25 underlying print suggests margin pressure intensified in Q4 with rise in supplies from China, particularly for agrochemical intermediates.

185ktpa of acetone and 100ktpa of isopropyl alcohol, including greenfield infrastructure capex for an aggregate investment of ~Rs35bn. pricing pressure, oversupply from China as well as elevated input costs, which appear to have softened now. Sequentially, Advanced Intermediates segment benefitted from volume gains in key products and new offtake agreements,...

Due to sharp correction in price, we upgrade to HOLD with TP of Rs.1,960. Deepak Nitrite's (DN) Q3FY25 revenue stood at Rs19bn, down 5.3% YoY and 6.3% QoQ. Operating performance for the quarter was impacted as plants remained idle due to deferral in demand, lag adjusted recovery in agchem, increase in RM cost as well as oversupply from Chinese counterparts. Planned maintenance shutdown at its phenolics plants further led to a decline in performance and an increase in phenol imports. Nitric acid project is expected...