Margin pressure to persist in the near term

Company
12 Aug 2024
5 Min read 
  • Deepak Nitrite's stock rating changed to Neutral with a target price of INR 3,060 (-1%).
  •  The company delivered a beat in 1QFY25 with strong performance in Deepak Phenolics.
  •  Margin pressure is expected to persist in the near term.
  •  The company is set for commissioning multiple projects in FY25.
  •  Despite the outperformance, EBITDA/EPS estimates were cut for FY25 due to near-term margin pressure.
  •  The stock trades at ~40x FY26E EPS of INR76 and at ~26x FY26E EV/EBITDA.
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