Right 2-3months back bottoming out of spreads did happen. FY2027 should be the time DNL can fire on all cylinders given the amount of capex going live.
Just like the promoter, Market might look to price in the inevitable probability much sooner.
4 Likes
DEEPAK NITRATE; The anti-dumping investigation concerning imports of 4,4-Diamino Stilbene-2,2-Disulphonic Acid (DASDA) from China PR was initiated vide notification dated 27th December 2024.
The applicant has claimed that the subject imports are undercutting and depressing their prices, resulting to financial losses and a negative return on capital employed. Moreover, despite increased production capacity, the applicant’s production and domestic sales have declined. Due to the presence of low-priced imports from China PR, the applicant’s market share has also declined.
5 Likes
Overall Subdued performance across the board. Looks like, the company is facing multiple headwinds.
- Phenolics: Revenue declined due to weaker spreads, but new product lines (Acetone derivatives) are expected to drive recovery.
- Advanced Intermediates: Growth supported by higher demand from agrochemicals and pharma, though raw material volatility remains a challenge.
- Fine & Specialty Chemicals: Stable performance with expansion in value-added products.
- Basic Chemicals: Steady demand but impacted by input cost fluctuations.
3 Likes
Is there a source for split in Rev mix between the different sources over the last few quarters?
One of the fallen small cap Angels, Deep Nitrite has best-in-class management and needs the business cycle to turn. Their stock is down due to huge fall in operating margin %.
They are focusing on increasing margins by backward integration and import substitution of phenol and acetone, and ramping capex on nitric acid, photochlorination and hydrogenation.
Triggers for Deepak Nitrite could be import substitution via electronics chemical manufacturing in India and the business cycle turning
Every stock is good at the right price. Currently this is richly valued at 45 P/E
11 Likes
There are few managements, i would like to follow because of their experience, honesty and capabilities. This is one of them. More 10-15% of correction and a value would start emerging. Personally, very bullish on few specialty chemicals.
Disclaimer: Not invested. Tracking very closely.
7 Likes
Deepak Nitrite | Q3 Concall
a. Normalization expected between Q1 & Q2 FY26
b. Q4 improvement to be fully realized in Q1FY26
c. Raw material costs seen normalizing in Q4
d. Q4 to be meaningfully better than Q3
7 Likes
Promoter buying in Deepak Nitrite
Smt. Ila D Mehta bought 30.7k shares at 1898.8/sh, earlier she acquired 1.46L shares at 2504/sh 
] Averaging the position by 50% , need to track
8 Likes
Deepak Nitrite Limited
Smt. Ila D. Mehta (Promoter Group) bought ~27.1k shares, value Rs. 5.146 cr (Rs. 1898.76 / share) through Market Purchase again
7 Likes
- Phenolics (Phenol + Acetone) → Bisphenol A (BPA) → Polycarbonate
Polycarbonate is produced using phenolics as feedstock
- Higher growth opportunity: Polycarbonate has rising demand in automotive, electronics, and construction sectors.
- Value addition: Moving downstream into polycarbonate can improve margins and reduce cyclicality compared to commodity chemicals like phenol.
- Integration benefits: Companies producing both phenolics and polycarbonate gain supply chain advantages, making them more valuable.
Trinseo is a global materials company specializing in plastics, latex binders, and synthetic rubber. It was originally part of Dow Chemical and later became an independent company. Trinseo provides advanced polymer solutions to industries like automotive, electronics, consumer goods, and construction.
- BPA reacts with phosgene or diphenyl carbonate in a polymerization process to produce polycarbonate resin.
- This reaction forms long polymer chains, giving polycarbonate its strength, transparency, and heat resistance.
Uses of Bisphenol-A (BPA):
- Polycarbonate plastics – Used in automotive parts, eyewear lenses, electronics, medical devices, and food containers.
- Epoxy resins – Used for coatings, adhesives, and protective linings in food & beverage cans.
Since BPA is the essential raw material for polycarbonate production, setting up a BPA unit allows for better integration, cost efficiency, and supply chain control in polycarbonate manufacturing.
Phenol spreads in India have fallen sharply
5 Likes
Bisphenol-A unit worries me . It is a known endocrine disruptor and EU has banned its use in food packaging. FDA also has some safeguards . Dont know what is to gain from setting up a unit for this since it will be banned across the world by the time they receive payback
4 Likes
Rationale for setting up BPA plant.
- BPA is used in manufacturing epoxy resins. Epoxy resin capacity in India will be almost double in a year or so as many players like Grasim, DCM Shriram are setting up epoxy resin plant.
- Currently a handsome share of BPA is met through imports.
2 Likes
Deepak Nitirite
FY27 is inflection year here, Full commissioning of PC Resin + BPA + IPA, Captive nitric acid integration improving cost base. Market is not yet pricing in FY27 optionalities fully
(Segment Wise Scenario)
Phenolics - 16% estimated margins
New Downstream Products (BPA, Polycarbonate Resins) will elevate blended EBITDA margin by FY27–28.
New: Bisphenol-A (BPA) – Higher-margin downstream play (20-25% margins)
New: Polycarbonate Resin – Compounding, import substitution (25-30% margins)
New Specialty Chemicals – Friedel-Craft, fluorination, personal care (18-25% margins )
FY27 ranges
Rev : 11k to 13k Cr
Ebitda Margins : 16-18.5%
PAT could be 1000Cr + if they stretch it could be 1300 Cr too.
Toulene Chain (Adv Intermediates) ::: Crude Oil → Toluene → Nitro Toluene → DASDA / OBA / Toluidines
Toluene is nitrated using nitric acid (which is why backward integration into nitric acid matters).
Benzene Chain ( Phenol, BPA, PC Resins) ::: Crude → Benzene → Cumene → Phenol + Acetone → BPA → Polycarbonate
Deepak is backward integrating all the way from Phenol → BPA → PC Resin, to capture margin and reduce volatility.
Propylene Chain (IPA & Acetone) ::: Crude → Propylene → IPA (Isopropyl Alcohol)
Deepak is India’s largest IPA player - End indus : Pharma, cleaning agents, sanitisers and solvents.
Forward Integration to PC/BPA : Adds value and cushions commodity volatility
Backward Integration into Nitric Acid : Secures nitration capacity for toluene products
Compounding Facility : Accesses sticky, higher-margin niche customers
6 Likes
If after 5 years and spending 5000cr on CAPEX the best the company achieves is the same PAT it achieved in FY22, then the stock is completely overvalued forget undervalued.
6 Likes