Firstcall Research's report on Deepak Nitrite
"Deepak Nitrite is a multi-division and multi-product company engaged in manufacturing and sales of organic intermediates, inorganic intermediates, fine and specialty chemicals, has reported its financial results for the quarter ended 30th June, 2015. The company’s net profit stood at Rs. 133.58 million against Rs. 96.72 million in the corresponding quarter ending of previous year, an increase of 38.11%. Revenue for the quarter increased by 4.21% and stood at Rs. 3383.22 million from Rs. 3246.55 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs. 1.28 a share during the quarter as against Rs. 0.93 over previous year period. Profit before interest, depreciation and tax is Rs. 381.75 million as against Rs. 281.96 million in the corresponding period of the previous year."
OUTLOOK AND CONCLUSIONAt the current market price of Rs. 72.05, the stock P/E ratio is at 12.49 x FY16E and 11.57 x FY17E respectively.
Earnings per share (EPS) of the company for the earnings for FY16E and FY17E are seen at Rs. 5.77 and Rs. 6.23 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 11% and 15% over 2014 to 2017E respectively.
On the basis of EV/EBITDA, the stock trades at 7.66 x for FY16E and 7.09 x for FY17E.
Price to Book Value of the stock is expected to be at 1.85 x and 1.60 x for FY16E and FY17E respectively.
"The company to continue gains from value added product portfolio and steady growth from the FWA segment. Growth opportunities in export as well domestic market remain encouraging and DNL’s diversified product portfolio would help offset the vagaries in the global markets. Hence, we recommend ‘BUY’ in this particular scrip with a target price of Rs 83 for Medium to Long term investment", says Firstcall Research Report.
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