Buy Deepak Nitrite, target Rs 346: Adand Rathi

Anand Rathi

Deepak Nitrite’s new green field expansion plan at Dahej, Gujarat for manufacturing phenol (2,00,000 ton/year) and acetone (1,20,000 T/year) should provide a significant increase in its top line and profitability.

The project is now well into its pre-commissioning activity & the company has set up a marketing team for customer outreach of the new products.

Due to India’s dependent heavily on the imports due to lack of domestic production capacity the macro scenarios for the domestic market looks promising for the company.

Deepak Nitrite has reported a revenue growth of 24.8 percent in its standalone sales in Q1-FY19 at Rs 421 crore as against Rs 337 crore in Q1-FY18.

The profit after tax for the company stood Rs 21.78 crore in Q1-FY19 as against Rs 20.10 crore in Q1-FY18.

We have a buy rating on Deepak Nitrite with a target price of Rs 346 per share based on 21.90x FY19E EPS of 15.80.

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