Deepak Nitrite (DN IN) – Company Update – Capacity Additions Threaten Polycarbonate Margins – Downgrade to ‘REDUCE’
Published on 13 Apr 2026
Indian polycarbonate (PC) resin demand grew at 14% CAGR during 2020-25, with imports accounting for all of it. DN’s upcoming 165tmtpa PC resin capacity addition is expected to help curb imports. However, the PC resin industry is marred with over-capacity and poor utilization, forcing closures of ~5% of global capacity recently. Consequently, DN’s investment of INR85bn in the upcoming fully integrated PC resin capacity, may suppress its return ratios, especially since Trinseo’s plant is based on older technology of Dow and is meant primarily for commodity grade PC. We downgrade the stock to ‘REDUCE’ with TP of INR1,354 on anticipated unfavorable risk-reward post the recent rally.
