Deepak Nitrite (DN IN) – Q2FY26 Result Update – Soft realizations keep margins under strain – HOLD
Published on 14 Nov 2025
DN’s Q2FY26 adjusted revenue stood at Rs18.8bn, declining by 7.2% YoY but was stable QoQ. Operating performance was impacted by ongoing pricing pressure, oversupply from China, and a decline in spreads. The Advanced Intermediates segment was impacted by effects of US tariffs as well as due to continued influx of Chinese products, leading to 3% decline in revenue. The Phenols segment reported 2%-3% volume growth, but profitability remained subdued due to lower spreads. Projects such as Nitric acid and MIBK/MIBC are likely to come online in Q4FY26. The total planned capex for the polycarbonate value chain stands at Rs85bn, the project timeline has been changed from previously guided Dec’27 to March’28, we believe that the project may face further delays.
DN has been undertaking numerous growth initiatives, primarily in the Phenolics segment. Domestic demand for phenol is expected to remain stronger; however, the threat of cheap imports will likely keep margins under pressure. The stock is currently trading at ~28x Sep’27 EPS. We value the stock at 28x Sep’27 EPS and maintain ‘HOLD’ rating.
