The company's September quarter performance showed significant top-line and bottom-line expansion, backed by operational gains and the commissioning of a new production facility. Despite quarterly revenue beating consensus forecasts, brokerage Motilal Oswal issued a sell rating due to a 200 basis point sequential contraction in gross margin. Additionally, the latest rally contrasts with persistent longer-term equity headwinds, as the stock remains down over both one-year and five-year horizons.
Key points
Operating profitability showed major recovery as EBITDA margins expanded from 10.7% to 20…: Operating profitability showed major recovery as EBITDA margins expanded from 10.7% to 20.4% year-on-year.
Motilal Oswal maintained a sell rating because gross margins declined by 200 basis points…: Motilal Oswal maintained a sell rating because gross margins declined by 200 basis points sequentially despite the quarterly revenue beat.
Extended performance metrics remain negative, reflecting declines of 10.77% year-to-date…: Extended performance metrics remain negative, reflecting declines of 10.77% year-to-date and 31.93% over a five-year period.
Sources checked by our analysis pipeline: 1
Deepak Nitrite share price surged as much as 9% in Friday's trading session after the company reported strong set of numbers during the September quarter results FY27 on Thursday.
Deepak Nitrite shares opened at ₹1,580 per share on NSE today, as compared to previous close of ₹1,476 on Thursday and touched an intraday high of ₹1,615 apiece on 30 October.
Deepak Nitrite posted a strong financial performance in the second quarter of FY27, with its net profit rising more than threefold to ₹398 crore from ₹118.7 crore in the corresponding quarter of the previous financial year.
The company's revenue increased 61.7% year-on-year to ₹3,076 crore, compared with ₹1,901.9 crore in the year-ago period, according to its quarterly results.
EBITDA, or earnings before interest, tax, depreciation and amortisation, climbed to ₹627 crore from ₹204.3 crore in the corresponding quarter last year. Meanwhile, the EBITDA margin expanded significantly to 20.4% from 10.7% a year earlier, indicating a substantial improvement in operating profitability.
Separately, Deepak Nitrite announced on September 29 that its material wholly owned subsidiary, Deepak Chem Tech Ltd, had commenced manufacturing…
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