Regardless of a pointy enhance in enter price, Deepak Nitrite reported Q4FY22 outcomes in step with analysts’ estimate. Nonetheless, margins fell off 920 bps year-on-year (YoY) to 21.9% as a result of enhance in realisations, although EBITDA/mt stays steady.
“Whereas rising enter prices have pressured margins, absolute profitability stays steady. We imagine Deepak Nitrite would profit from ongoing capex,” stated brokerage and analysis agency Edelweiss in a word.
The brokerage has retained its ‘Purchase’ ranking on Deepak Nitrite shares with a TP of ₹3,127 primarily based on a rollover to Q2FY24E, and good long-term development prospects.
Deepak Nitrite reported income development of 28% YoY, primarily as a result of rising costs. Administration stays assured of defending absolute margins on per mt foundation given acceptability from prospects and environment friendly price administration, Edelweiss highlighted.
“We stay optimistic on the longer term outlook of the corporate. Regardless of inflationary atmosphere, administration guided for ₹15 bn of capex coming on-line over subsequent 12-18 months. Nonetheless, rising enter costs and cautious margin outlook result in lower in PAT estimates by 2%/3% for FY23/24E,” stated one other brokerage Ambit.
The brokerage home has maintained Purchase ranking on the specialty chemical inventory with goal worth of ₹3,011. Shares of Deepak Nitrite are down over 30% from its all time excessive, whereas the inventory is down 19% in 2022 (YTD) up to now.
Key dangers, as per Ambit, might be mission delays, sustained volatility in uncooked materials costs, and macro headwinds in key geography like India.
The views and suggestions made above are these of particular person analysts or broking firms, and never of Mint.
Supply: Live Mint