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Deepak Nitrite Q1 Review - Focus On Advance, High-Value Products Intensifies: Motilal Oswal

Deepak Nitrite Q1 Review - Focus On Advance, High-Value Products Intensifies: Motilal Oswal

<div class="paragraphs"><p>An employee holds a glass flask in a research laboratory. (Photographer: Krisztian Bocsi/Bloomberg)</p></div>
An employee holds a glass flask in a research laboratory. (Photographer: Krisztian Bocsi/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

Deepak Nitrite Ltd. reported a beat on our estimates, driven by better-than-expected margins in phenolics and margins expansion in basic chemicals.

Deepak Nitrite's Ebit margin for the fine and specialty and performance products segments contracted.

Despite the huge beat on our estimate, we continue to highlight the risk of overall margin contraction from the normalisation of phenolics product prices.

As a result, we build in an Ebitda margin of 27% in FY22E (up from 26% earlier) and 26% for FY23/24E.

That said, strong domestic demand for phenolics, with higher exports to countries such as the U.S. and China, could keep product prices and margins strong in this segment – presenting an upside risk to our estimates.

Click on the attachment to read the full report:

Motilal Oswal Deepak Nitrite Q1FY22 Result Update.pdf

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