Deepak Nitrite lost 25% in 2 weeks.

Shares of Deepak group these days fell the maximum amount as 10% to ₹2,201 when the chemical company declared its earnings post market hours on Wednesday. when today' fall, shares of Deepak group is down considerably from its record high of ₹3,020, hit earlier this month. Consolidated net income lordotic to ₹254 large integer within the Sep quarter, down from ₹302 crore in the Gregorian calendar month quarter. however as compared to year-on-year basis, profit is up significantly from last year' ₹170 crore. Total income rose to ₹1,681 crore from ₹1,526 crore in the June quarter.

According to Motilal Oswal, Deepak Nitrite reported "mixed results, with EBITDA 10% above our estimate at INR 3.9 billion, while the EBITDA margin was below 23% (estimated at 26.7%) - the most bass from 4QFY19 ".

"Phenolics still aid the performance of different segments, because the EBIT margin in Fine and Specialty Chemicals dip for the fourth consecutive quarter and therefore the same for Basic Chemicals normalize," the brokerage said.

The broker lowered the action to neutral. "The stock is trading at 31x / 29x FY23E / FY24E EPS, due to limited earnings growth opportunities until its new expansions go non-commissioned (downstream phenol products would result in consumption captive of 3540 phenol%). We downgrade the share to Neutral. By valuing the share at 28x December 23E EPS, we arrive at a price target of 2300, "Motilal Oswal said in a statement.

The brokerage however aforementioned that the “management’s augmented focus towards advanced/high worth product would aid margin enlargement ANd property for the company, that investors are most cautious of. it'd conjointly end in a multiple re-rating for the stock because the mixture of Specialty/complex chemistry products increases. Despite a capex of ₹1800 large integer over following 3 years, it's expected to show net cash positive by FY23E, with an FCF generation of ₹1800 crore over FY22-24E.