CD Equisearch is bullish on Deepak Nitrite has recommended buy rating on the stock with a target price of Rs 332 in its research report dated March 26, 2019.
CD Equisearch's research report on Deepak Nitrite
Increased construction activities in both residential and commercial domains across the globe (fueled by rapid economic growth) has boosted of take of phenol resins which find use in production of plywood, laminated beams and flooring panels. This has been aptly manifested in 3.4% CAGR growth of the global phenol market during 2011-18, reaching $20 bn in 2018 thus. The market is estimated to grow by a further 5.2% annually during 2019-2024 according to some estimate by Research And Markets. Asia Pacific continues to dominate the global sweepstakes propelled by growing demand production and consumption of phenol in China. Demand for phenol also got a leg up from rise in purchasing power of consumers that has escalated investments in chemical, automotive and construction industries. For phenol, Asia Pacific region is followed by Europe, US, Middle East and Latin America.
On balance we maintain our buy rating on the stock with revised target of Rs 332 (previous target: Rs 295) based on 20x FY20e earnings.
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