Deepak Nitrite Limited

Basic Materials — Chemicals · NSE

₹1,605.50+₹5.90 (+0.37%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Deepak Nitrite Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Deepak Nitrite Limited manufactures, trades, and sells chemical intermediates in India and internationally. It operates through Advanced Intermediates and Phenolics segments.

IndustryChemicals

SectorBasic Materials

Employees1,447

Annual revenue₹7,761 Cr

How does it make money?

Turns over ₹7,761 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 1,447 employees supports ₹5.36 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin13.2%

Net margin7.1%

Revenue / employee₹5.36 Cr

Who are its competitors?

The closest listed comparisons in its industry are PIDILITE INDUSTRIES LTD, SRF LTD, UPL LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

PIDILITE INDUSTRIES LTDP/E 57.8x · ROE 24.4%

SRF LTDP/E 33.8x · ROE 15.4%

UPL LIMITEDP/E 21.5x · ROE 6.1%

What is its competitive advantage?Little sign of one

Returns on capital of 10.8% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE10.8%

ROE9.4%

Peer median ROE15.4%

What is the outlook?

17 analysts covering the stock expect revenue to grow about 8.6% and earnings to fall about 7.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+8.6%

Est. earnings growth-7.7%

Analysts17

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -2% while net margin moved -34% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-2%

Margin effect-34%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 0.5% a year
✗ Profit has declined at 13.5% a year

Quality vs. Valuation

Company Quality

42/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

63/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

27.9x

3Y Median

35.1x

40 monthly readings · mean 36.5x · range 25.2x–49.5x

Sector Median

33.8x

median of 3 sector peers

🟢Current valuation is approximately 20% below its 3y median of 35.1x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 17% below the peer median of 33.8x.

vs. its own history

Cheap

35.1x median over 40 months · -20%

vs. sector peers

Fair

33.8x median of 3 peers · -17%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

27.9x

P/B

3.75x

EV/EBITDA

22.7x

PEG

—

Dividend Yield

0.47%

What's Good / What's Bad

🟢 What's Going Well3

Valuation below its historical average
At 27.9x the stock trades 20% below its own median of 35.1x.
Very low debt
Debt/Equity of 0.28x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from 16.7% to 13.2% over 3 years.
Debt is rising
Total debt is up 2148% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 20.8% to 9.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 27.0% to 10.8% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 1 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 2148% over 3 years, from ₹73 Cr to ₹1,638 Cr.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹659 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 35% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 3.5 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 20% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 16.7% to 13.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 20.8% to 9.4%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 11%✓ 13.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹659 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✓ 10.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 35.1x✓ 27.9x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 6 neutral · 1 weak

Market Cap

₹21,898 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

27.9x

Fair

Fairly valued against the generic band

P/B Ratio

3.75x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹57.48

Profitable

Profitable on a per-share basis

ROE

9.4%

Moderate

Moderate capital efficiency

ROCE

10.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.28x

Low

Conservative leverage

Revenue Growth (YoY)

36.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

207.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.47%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹659 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹1,605.5

P/E (Forward)

25.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

18.5%

Good

Healthy core-business profitability

Net Margin

9.1%

Average

Average bottom-line conversion

Current Ratio

2.40

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.49

Defensive

Steadier than the market

52W Range Position

53%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1580.7 / 1661.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

51.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹7,883 Cr	₹7,610 Cr	₹8,091 Cr	₹7,761 Cr	-0.5%
EBITDA	₹1,316 Cr	₹1,168 Cr	₹1,151 Cr	₹1,028 Cr	-7.9%
EBITDA Margin	16.7%	15.3%	14.2%	13.2%	—
PAT (Net Profit)	₹852 Cr	₹811 Cr	₹697 Cr	₹551 Cr	-13.5%
EPS	₹62.46	₹59.45	₹51.12	₹40.36	-13.5%
ROE	20.8%	16.9%	12.9%	9.4%	—
ROCE	27.0%	21.0%	14.4%	10.8%	—
Total Debt	₹73 Cr	₹286 Cr	₹1,267 Cr	₹1,638 Cr	+182.2%
Free Cash Flow	₹289 Cr	₹106 Cr	-₹512 Cr	-₹659 Cr	—

🟡 Revenue has been broadly flat over 3 years (-0.5% a year).

🔴 EBITDA has shrunk at 7.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 16.7% to 13.2% over 3 years (-3.5 pts).

🔴 PAT (Net Profit) has shrunk at 13.5% a year over 3 years.

🔴 EPS has shrunk at 13.5% a year over 3 years.

🔴 ROE has fallen from 20.8% to 9.4% over 3 years (-11.4 pts).

🔴 ROCE has fallen from 27.0% to 10.8% over 3 years (-16.2 pts).

🔴 Total Debt has grown at 182.2% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹289 Cr to -₹659 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹8,681 Cr

Total Liabilities

₹2,811 Cr

Total Debt

₹1,638 Cr

Cash & Equivalents

₹243 Cr

Operating Cash Flow

₹539 Cr

Capex

-₹1,198 Cr

Shareholding (proxy)

Institutional Holding

26.7%

Insider Holding

49.9%

Corporate Actions

Next Earnings

11 Nov 2026

Dividend Rate

₹7.5

Ex-Dividend Date

27 Jul 2026

Analyst Consensus

Recommendations

10 Buy · 4 Hold · 4 Sell

Target Price (Mean)

₹1,870.5

+16.5% vs CMP

Target Range

₹1,300 – ₹2,200

Peer Comparison

Company	P/E	ROE
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

1 positive3 mixed2 general

Deepak Nitrite (NSEI:DEEPAKNTR) Stock Forecast & Analyst Predictions

Simply Wall Street, 14 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

DEEPAKNTR Outlook for the Week

Equitypandit, 09 Oct

DEEPAKNTR Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Deepak Nitrite (DEEPAKNTR) Share/Stock Price Live, NSE

TechGraph, 08 Oct

Deepak Nitrite shares jump 4% after Q1FY27 profit jumps 209%, revenue rises 36% YoY

The Economic Times, 05 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Deepak Nitrite Share Price Declines; Fundamentals Reviewed

Univest, 24 SeptPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate10.5/20

🟢Financial HealthStrong13/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak5.8/15

🟡ValuationFair9.5/15

🟡RiskModerate5.8/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 11%13.2%
✗Free cash flow remains positive-₹659 Cr
✓Debt / EBITDA stays below 2x1.6x
✓ROCE stays above 8%10.8%
✓Valuation vs its own median of 35.1x27.9x today