Deepak Nitrite- Leading Chemical Manufacturing Company- Emerging as Black Horse amid India China face off

Ranked amongst Fortune Next 500 and 25 Top wealth creators by the prestigious Fortune India Magazine, Deepak Nitrite Limited (DNL) founded by Visionary C K Meheta, today is one of India's fastest-growing chemical intermediates companies with a diversified business of Basic Chemicals , Fine & Speciality and Performance Products. Further, it manufactures Phenol, Acetone & Iso-Propyl Alcohol through its wholly-owned subsidiary, Deepak Phenolics Limited.

Manufacturing Facility

Deepak Nitrite’s manufacturing facilities are located at Nandesari and Dahej in Gujarat, Roha and Taloja in Maharashtra, and Hyderabad in Telangana. Today, DNL caters to over 700 customers in 6 continents with more than 30 products. DNL is recognized globally as a ‘Supplier of Choice’ by clients 

spread across 6 continents in over 30 countries.

As a partner of choice for Domestic and Global Chemical majors, DNL is amongst one of the fastest growing company in India, adhering to ‘Responsible Care’ and is also a proud member of ‘Together for Sustainability’ and a founder member of the Indian Chemical Council’s ‘Nicer

Globe’. Evolving to meet the strategic demands of the business, the industry, the society and the planet, we are striving to build a sustainable future with our 3P approach – Planet, People & Profit.

Some Interesting Numbers

Around

5

decades legacy of trust and quality

100+

products serve numerous industries

700+

satisfied customers

70%

market share in India in important inorganic compounds

 

Since the year

2000

steady profit growth

13%

10 year revenue CAGR

6

Continents

Prestigious Customers

Some of the Prestigious Customers are :

> Bayer

> Unilever

> Indian Oil

> Rallies India

> BASF

> Loreal

> Reliance Industries

Application of DNL’s Products

→ Pharmaceuticals

→ Agrochemicals

→ Personal Care

→ Adhesive 

→ Paper

→ Coatings

→ Detergents

→ Dyes and Pigments 

And Many More.

Basic Chemical Customers of DNL

Fine and Speciality Customers of DNL

Optical Brightening Agents Customers of DNL

Financials

The company has robust financials. If any one to Study the Financials go to https://www.godeepak.com/wp-content/uploads/2020/07/Deepak_Nitrite-AR_2020.pdf

A quick snapshot is given below for your ready reference.

Recent Developments

The US-based asset management company acquired 9,25,451 shares through SSGA Funds Management in Deepak Nitrite (representing 0.67 percent of its total paid-up equity capital) at Rs 632.36 per share.

Recently DNL has announced Iso-Propyl Alcohol (IPA) capacity expansion from 30k TPA to 60k TPA. This will be funded through internal accruals. Capex cost 50 crs. approx.

Chartered Accountants

Kartikeya Raval who has signed the Audit Report and Balance Sheet and Statement of Profit and Loss of the company for FY 2019-20 on behalf of Deloitte Haskins & Sells LLP, Chartered Accountants (Firm’s Registration No. 117366W/W-100018).

Technicals

The script of the company trading around Rs 610/share as on 07th August 2020. On the technical chart it has support around Rs 550-560 and more stronger support at Rs 500-515 level and on the higher side it can top around Rs 650 plus. 

Recommendation

Pick DNL of small quantities on SIP Basis when opportunity comes at a lower level in tandem with market downfall.

In the current Covid -19 Market Scenario there is an immense opportunity for this company to grab a great chunk of market shares from its peers and Global Competitors in terms of its product portfolio.

An Optimistic Target price may be four digits in coming times if anti-china sentiments and atma-nirvar themes continue to pick up.

Conclusion

I am not an investment advisor as per SEBI guidelines. The opinions are personal. The above discussions are only meant for educating readers. The intention is to share knowledge to enrich potential investors and also get enriched by their feedback. My views are not biased.