Edelweiss maintains buy on Deepak Nitrite, target price Rs 370

Edelweiss maintained buy rating for Deepak Nitrite in the long term with a target price of Rs 370 following a meeting with its management. The stock ended down 2.9% at Rs 290.65 on Tuesday while the BSE Sensex closed 361.92 down at 38,305.41. The equity market was closed on Tuesday on account of Gandhi Jayanti.

Company Financials

For the quarter ended 30-06-2019, the company has reported consolidated sales of Rs 1050.98 crore, up 4.23% from last quarter sales of Rs 1008.30 crore and up 126.55% from last year same quarter sales of Rs 463.91 crore. The company has reported net profit after tax of Rs 131.61 crore in the latest quarter.


Investment Rationale

Strong show in performance product segment is expected to sustain in second quarter and third quarter of FY20 on account of surge in di-amino stilbene disulphate acid (DASDA) prices owing to supply-side challenges, said Edelweiss. The brokerage continues to be positive on Deepak Nitrite given its diversified and integrated business model bolstered by strong demand-side levers.