Whalesbook
Brokerage Divergence on Deepak Nitrite After Q4
Deepak Nitrite shares are being closely watched after its Q4FY26 results prompted mixed reactions from analysts. Emkay Global Financial Services upgraded the stock to 'Buy' from 'Reduce', setting a new target price of ₹2000 (up from ₹1800), suggesting a potential 15.2% upside. The firm noted a significant increase in adjusted EBITDA, both year-on-year and quarter-on-quarter, which beat expectations.
Emkay's Bullish Case: Margin Recovery and Growth
Emkay's positive view is based on a recovering AI segment, with strong domestic demand compensating for weaker export performance. The advanced intermediates segment is expected to improve margins, and the phenolics business remains profitable due to favorable spreads. Deepak Nitrite's Phenol-2 capital expenditure is on schedule, with revenue expected to begin in FY2029. Emkay also increased its EBITDA forecasts for FY27 and FY28 by 12% and 6%, respectively, anticipating better pricing and volume growth.
MOSL's Caution: Persistent Headwinds in Intermediates
Motilal Oswal Financial Services, however, kept its 'Sell' rating but raised its target price to ₹1450 from ₹1130. While noting stable operations despite economic challenges, MOSL expressed caution about continued margin pressures in Deepak Nitrite's key intermediate segments. The firm forecasts revenue to grow at an 11% CAGR and profit after tax at a 23% CAGR from FY26 to FY28. However, MOSL believes current valuations are too high given these specific segment pressures.
Deepak Nitrite's Q4 Financials and Dividend
For Q4FY26, Deepak Nitrite posted a consolidated net profit of ₹219.7 crore, up 8.56% year-on-year. Revenue decreased slightly by 2.7% to ₹2,120.3 crore, but EBITDA grew 18.8% to ₹376 crore, boosting margins to 17.7%. The board recommended a dividend of ₹7.50 per share, pending shareholder approval.