The performance products segment has been a write off since Covid hit. They deal in optical brighteners and whitening agents and the entire industry ie paper, textile has been hit since Covid Began and dasda prices weren’t sustainable. Was expected to be a wash out until covid goes away so don’t expect anything here until end of this year. The amazing thing is just a few years ago performance products and basic chem was all Deepak could depend on and their quarters were defined by the busts and booms in those 2 segments prices of dasda etc. Now it barely moves the ticker when it underperforms since they have phenol and spec chem and are basically a new company.
I’m thinking of performance products as just a bonus segment now that will rise when prices of dasda etc rises and give an extra boost to earnings when phenol or spec chem underperforms
@Chins this was my thesis which explained this in the Deepak nitrite thread way back in August when Deepak was trading around 580 rs. After a horrible result and when I bought most of my holdings. It explains everything a lot better and my thesis from that day(it was pure speculation and calculation then) hasn’t changed and infact has come to pass almost exactly lol (I am very proud of this investment thesis and love sharing it since I doubt il ever hit anything so beautifully again lol)
Would I buy more now? No chance. If phenol prices turn specialty chemicals hasn’t reached a big enough level to support the valuations. However, I’m expecting spec chem to become an even bigger contributor over the next 5 years. If markets go mad and value Deepak at 60/70 PE over the next 1 or 2 quarters due to a phenol and dasda price explosion and spec chem hasnt increased at an equal rate to match the valuations then I may sell holdings equal to my original allocation and hold the rest ie majority. If spec chem continues to grow I won’t touch a single share until the journey to spec chem is fully completed and will reassess then when hopefully it will be a 100000 mcap company(which is a target i have fixed in my head for a period of 5 years down to line so that i ignore daily price movements)