Depreciation of exactly that humungous capex would weigh down PAT numbers from its true value. Looking at EBITDA margins is a much better indicator.
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Hello Gautam,
I check the Phenol price on screener, which is not updated timely. Could you please tell me the link where you check the prices?
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Operating profit margin is currently near a multi-year low (13%). Raw material prices are high, advanced intermediaries are facing demand-side issues, phenol prices are low and there is a global oversupply.
With depressed sales, margins, and profits, the P/E and price-to-sales ratios appear optically high.
The announced CAPEX is expected to start delivering results from FY27 onwards.
The next phase of the company is purely dependent on the current bets it has taken. The important question here is whether it will continue as a commodity chemicals player or move higher up the value chain.
Considering all of the above, anyone investing in the company is essentially betting on the jockey (i.e., the promoters).
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I was just reading about the company. Can anyone please tell me where I can find the past 10 years’ prices of phenol and acetone as commodities?
Another poor quarter but is it in the price already? Waiting for the earnings call. Is someone studying/tracking this actively enough to comment on what could possibly be the recovery trigger apart from margin expansion?
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Heavy dumping from China + tariff disruptions
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Advanced Intermediates (AI) – Weak but Stabilizing
-Customer destocking cycle ending
-Agro-intermediate volumes in Q2 were “basically zero -
Phenolics – Strong Quarter
-Record isopropyl alcohol production and sales
-Lower feedstock cost + favorable product mix
-Plant efficiency expected to be even better in winter months
Capex and all :
Hydrogenation Asset – Commissioned
New R&D Centre – Commissioned (Focus: * new chemistries * polymer tech * scale-up & semi-commercial batches)
Nitric Acid & WNA/CNA Plant (commissioning this Qtr)
Polycarbonate Mega Complex ( One of world’s first fully integrated phenolics → BPA → Polycarbonate value chains.)
Integration benefits to meaningfully start from Q4 FY26
Nitric Acid + hydrogenation + nitration + MPC plants → margin uplift.
Track capex here and dumping.
Most Indian phenol plants (including DPL/DPCL) see a meaningful uplift in margins during winter because:
- cost of production drops
- yields improve
- quality consistency improves
- downtime reduces
Street expectation:
Winter quarters (Q3 + Q4) show structural margin improvement vs Q1/Q2.
Deepak management has hinted at this many times historically without explicitly quantifying it.
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Reliance and Haldia Petrochem are coming up with Phenol Capacity… It can be a major supply issue..
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Deepak Nitrite available at 52 week low. On P/Book and Market cap /sales it is available at less than 5 and 10 year median. Today I listened the AGM recording of the company for FY 2025 available on the you tube. The management has explained beautifully strategy of the company going forward. To avoid any client concentration issue, as the company has faced in case of agro intermediates, the plant has been made fungible which shows management’s approach to become anti fragile. with commissioning of the integrated poly carbonate plant, DN may enter into a new orbit. So over a period of 2 to 3 years, it seems to be an excellent investment opportunity. Sharing the link of AGM
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Deepak Nitrite Nitric acid plant production started at Nandesari
deepak nitrite.pdf (2.4 MB)
Promoter has again bought shares worth ~8 Cr. This is the only stock that I have observed over the last 3-4 years that has consistent promoter buying!
Not sure what this signifies, because I see significant headwinds for the business in the near term at least.
Discl : Invested at higher levels
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