Equity Analysis /
India

IN : Deepak Nitrite Ltd - Deep dive into company’s expansion project

    CGS-CIMB
    8 January 2022
    Published byCGS-CIMB

    With the help of an environmental clearance document filed on govt website, we have deep dived into the products to be manufactured at its new plant. Our analysis indicates that in a historical average gross profitability scenario, the new project can add Rs26bn to company’s gross profit over next five years. Timely execution, and sales ramp-up can lead gross profit to ~1.8X by FY27F, which is more than priced in. Risk-reward ratio unfavourable. Retain REDUCE.