Multibagger alert! This chemical stock doubled shareholder's money in 2021

The year 2021 has delivered a huge number of multibagger stocks. Shares of Deepak Nitrite have more than doubled investors' money so far in 2021. In comparison, the Nifty 50 index gained over 18 percent and the S&P BSE Sensex index rose over 17 percent.
 
This multibagger stock has surged from Rs 989 to Rs 2,145 mark. It has gained 116 per cent since the beginning of this year and risen 184 per cent in the last one year.
 
Long-term investors have made fortunes by investing in this chemical stock as it has surged 1,922 per cent in the last five years and zoomed 11,590 per cent in the last ten years.
 
The company reported a net profit of Rs 302.63 crore for the quarter ended June 2021 compared to a profit of Rs 98.95 in the year-ago period. Revenue from operations grew 126 per cent to Rs 1,526.22 crore in the June-ended quarter against Rs 674.49 crore a year ago.
 
According to MarketsMojo, the company has declared positive results for the last 4 consecutive quarters and has a strong ability to service debt as the company has a low Debt to EBITDA ratio of 1.29 times. It has strong long-term fundamental strength with an average Return on Capital Employed (ROCE) of 30.34%.
 
Also, the technical trend has improved from Mildly Bullish on July 30, 2021, and the stock is technically in a Bullish range now. Multiple factors for the stock are bullish like MACD, Bollinger Band, KST, DOW and OBV. However, it noted that the valuation seems to be very expensive right now.
 
Motilal Oswal believes that Deepak Nitrate has the most lucrative profile in the entire Specialty Chemicals space. "A recovery in demand in OBA and DASDA (i.e. Performance Chemicals) is expected over FY22, while demand for Agrochemical and Personal Care products continue to remain robust. Despite a capex plan of INR18b over the next three years, it is expected to turn net cash positive by FY23E, with an FCF generation of INR17.4b over FY22-24E," the brokerage firm noted.
 
It further added that the commissioning of IPA expansion and the captive power plant are expected by the end of 1HFY22. The captive power plant would increase DPL’s competitiveness in this segment. It has a 'Buy' rating on the stock with a target price of Rs 2,350 per share.
 
According to a recent report by Motilal Oswal on the Indian speciality chemicals sector, the euphoria due to: a) consolidation of polluting Chemical companies in China, b) COVID-related supply chain disruptions, and c) supportive margins have led to multiples expansion for the Indian specialty chemical companies.
 
A slew of petrochemical expansions is also underway by major players like Indian Oil, Hindustan Petroleum, GAIL, Nayara Energy, Haldia Petrochemicals, and HMEL, which would drive demand for Chemicals and Specialty Chemicals in the country.
 
Deepak Nitrite is an intermediate chemical company, with a diversified business of Basic Chemicals, Fine and Specialty Chemicals, and Performance Products. It manufactures phenol, acetone and isopropyl alcohol (IPA) through its subsidiary, Deepak Phenolics (DPL).