Deepak Nitrite Ltd. share price target

Helped by robust growth in phenolics and basic intermediates businesses, revenues from operations rose by 39.4% to Rs 1722.27 in Q3 compared to Rs 1234.69 crs in the same quarter a year ago. Backed by robust demand in India and in key export markets, DNL's phenolics business posted yet another record setting asset utilization rate (capacity utilization 117% for Q3), while the basic intermediates business profited from healthy product realizations as price hikes were undertaken to offset rising raw material prices. After a lull in demand, DNL's performance products business did...

DN reported a miss on our estimates. EBITDA came in 8% lower than our estimate at INR3.5b, while EBITDA margin, at 20.4%, was lower than our estimate of 25.1%, the lowest since 4QFY19. Phenolics continued its strong growth, with Basic Intermediates and the Performance Products segment performing well in 3QFY22. EBIT margin in the Fine and Specialty Chemicals fell for the fifth...

DN reported a mixed bag result, with EBITDA 10% higher than our estimate at INR3.9b, while EBITDA margin was lower at 23% (est. 26.7%) the lowest since 4QFY19. Phenolics continue to act as a drag on performance of other segments, as the EBIT margin in Fine and Specialty Chemicals dip for the fourth consecutive quarter and the same for Basic Chemicals normalize. EBIT mix continues to remain largely the same for the last three quarters, with contribution from Phenolics at 63% (up from an average of 51% in FY21). This comes at the cost of a decline in contribution from the most margin lucrative Fine...

Bolstered by phenolics and fine & speciality chemicals business, DNL's income from operations rose apace in Q4 with the phenolics accounting for nearly two-thirds of the whole. Swiftly pacing, its phenol business logged capacity utilization in excess of 115% when compared to 98% in the same quarter a year ago. With little scoping of draining out reward of operating leverage at such record production churn, its EBIT margins admirably...

A stellar quarter

Deepak Nitrite Limited manufactures chemical intermediates.