Multibagger stock of 2022: Chemical stock hits 52-week high. IIFL Securities sees strong upside
Premium- Multibagger stock of 2022: This chemical stock has delivered 97 per cent return in YTD time
Multibagger of 2022: After hitting back-to-back upper circuits on lats two trade sessions, Deepak Fertilisers share price has climbed today to its new 52-week high of ₹815 apiece levels. Deepak Fertilisers share price today opened upside and went on to hit intraday high of ₹815 apiece levels claiming new 52-week peak. But, profit-booking triggered and the stock started to fall and hit its intraday low of ₹758.80 on NSE. In In last one week, this chemical stock has surged more than 15 per cent whereas in year-to-date (YTD) time, this chemical stock has risen more than 97 per cent. So, it one of the potential multibagger stocks in 2022.
However, IIFL Securities sees further upside in the stock and it believes that the multibagger stock for 2022 may continue to surge in next 12 month. As per the IIFL Securities research report, Deepak Fertilisers share price may go up to ₹1,005 piece, up by near 35 per cent from its current ₹790 per share levels. Time horizon given by IIFL Securities research is 12 months.
Highlighting the fundamentals that may continue to fuel Deepak Fertilisers share price rally, IIFL Securities says, "1Q EBITDA/PAT topped IIFL (expectation) by 70%/79%, driven by rising strength in the TAN and nitric acid businesses. Spreads of both these products remain elevated and have risen sequentially. The Chemical company's management expects demand of nitric acid and TAN to remain robust in the near term. However, it also opined that the prevailing spreads are abnormally high and difficult to predict given uncertain times. Performance may decline sequentially as 2Q is a lean quarter due to lower demand from the explosives industry."
"We assume a healthy moderation in spreads in the subsequent quarters and a peak net debt of Rs33bn as at Mar-23. However should current spreads sustain peak net debt could be lower as there could be Rs3-4bn upside risk to our FY23 EBIDTA estimates. At only 10x FY24ii P/E, we continue to find the stock undervalued. Commissioning of the ammonia and TAN projects will drive medium term growth," brokerage added.
On suggestion to positional investors in regard to Deepak Fertilisers share price, IIFL Securities said that the stock may go up to ₹1,005 apiece levels in next 12 months.
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