DAM Capital has maintained a Buy rating on Deepak Nitrite and target price of ₹2,142, citing near-term headwinds in its AI and agri-chemicals businesses.
- AI business: Q4 expected to be significantly better than Q3, with demand recovery in key segments.
- Agrochemicals business: Normalization expected only by Q2FY26, as demand remains weak.
- Phenolics business: Q4 could be impacted by higher imports, with normalization likely by Q1FY26.
The company has multiple upcoming projects, including:
- Photo-halogenation and fluorination chemistries
- New acid unit
- MIDC / MIBK projects worth ₹20 billion
DAM Capital expects these projects to contribute meaningfully from H2FY26 onwards, driving EBITDA margin expansion. However, the brokerage has cut its FY25E, FY26E, and FY27E EPS estimates by 20%, 24%, and 12% respectively, reflecting the near-term pressure on earnings.
