Key High lights from Q1 Fy24 Concall of
DEEPAK NITRITE


🔅The company recorded the highest production for some of their products in May 2023. The company was able to export key pharma and agro intermediates to China from the last 2 quarters despite the tough global situation.


🔅The company has de-risked its business model by developing alternate sources for their raw materials. The company has secured its supplies with the help of these sources.

🔅The company is setting up an R&D center in Vadodara. This R&D center will help the company in strengthening their capabilities in existing as well as new complex chemistries.

🔅In this R&D center, the company is developing processes currently in their technical toolkit and adding new processes in this. This development is right now at an advanced stage. The company is doing software and hardware integration between R&D, scale-up facilities and challenged capability plants which are somewhere between mini plants and pilot plants.

🔅The company is planning to launch 3 life science products which will be downstream products of the company’s existing product basket. These products have been tied-up with strategic customers in multi-year contracts.

🔅The company’s products find end-uses in industries such as plywood and construction, automobiles, pharma, dyes, agro, paper and textiles. For plywood and construction and automobiles, the company is seeing an improving demand trend while for others, the trend has been mostly flattish. The company expects the trend here to improve soon.


🔅The company has announced a capex of ₹2500 crores for FY24 and FY25 combined mainly for their Phenolics business and for other areas like photochlorination, fluorination, polycarbonate compounding and others.

🔅Phenolics' business has been using more acetone in their downstream products instead of phenol. The company expects this use of acetone to increase further after they commission their projects on methyl isobutyl carbinol and methyl isobutyl ketone both of which are acetone derivatives. The company expects to commission both these projects in Q1FY25. The earlier guidance was for Q4FY24. However, due to certain challenges faced by the technology supplier from their sub-contractors, the company had to revise this guidance

🔅The company plans to commission the photochlorination and fluorination project in Q3FY24 and the acid project in Q3FY24.

🔅Deepak Chem Tech Ltd(DCTL) a WOS of the company has signed a ₹5000 crore MOU with the Government of Gujarat to manufacture phenol, acetone and
bisphenol in Gujarat. As per the press release of the company, ₹3500 crore will be towards phenol and bisphenol and the remaining towards fine and specialty chemicals.

🔅The MOU amount will be invested in the next 2-3 years. The company plans to complete the entire project by FY26 or FY27. The company plans to fund this capex with a mix of debt and internal accruals.

🔅The company plans to maintain a EBITDA margin of 12-15% in Q2 and Q3 for Deepak Phenolics. In DNL, the company is seeing margins in the range of 20-22%. On a consolidated basis, the company is seeing margins in the range of 15-18%.

Themes & Sectors in Favours just an view

Themes where I still see possibilities with
logics: Selection will be key 🔐

Immediate : Upto 3 months

🌾 Rice :
12 years high prices of rice

🍬 Sugar :
Back to back sugar shortage

(One needs to follow closely, since both are cyclical and political in nature)

Short term : Upto 6 months

📝 Paper :
Plastic to paper seeing traction and elections ahead

🪴 Fertiliser :
Election year and improvement in fundamentals

Medium term : 6 months to 1 year

⚗️ Chemicals :
Turnaround after good 1.5-2 years in product prices across, margins to improve from Q2 onwards. H2 and next year to be good (Focus on tracking prices and capex)

💻 IT : India has emmence potential and every day new opportunities emerging in this sector. Automation era.

Long term: More than 1 year

🚗 Auto and Autoancilliaries :
A lot is happening in this sector. Look for companies which can grow much bigger with scale.

👷‍♀️👷Infrastructure and ⛏️
Mining:
With pace of growth, India 🇮🇳 needs infra. For Mining, there is huge push to make 🇮🇳 self sufficient, plus sector is still very undervalued

Sectors are chosen basis valuation at which these sectors are available

Disclainer - Study 📚 and take your own decisions.All views expressed are only for education & study purpose.

Just an observation

NIFTY VALUATION P.E

Highest PE Ratio was in
Feb'21 ➡️ 41.23

IN Year 2000/2008 & 2019
Top was Made Around
29.90 - 28.29 P.E Zone

Current Nifty PE Ratio ➡️ 22.37

Tata Power

Fresh 52wk High

276

Almost 16 months of downdrag and consolidation after 3x

Watchout for close avove 290 zone

ADSL

ON RADAR AGAIN

145 - 146

Days Low - 145.30

Support@ 137

Those who missed add on all dips for next 12/18/24/30 months

Long way to Go

Investors Psychology

In stock markets max focus on making Quick 5%-10%-20% return.

Very Few focus on getting 100%-200%-500-1000% returns in 2- 3-5-7 years or so that's called wealth creation

For this kind of Returns, 25-30% RISK on capital needs to be taken

Average PATIENCE period 3+ years.

Investing is a Business
&
Not a Casino.

Even good Bussiness has bad time and takes time to get back on track and market runs on sentiments in short to medium Term

Think like a Business.

ISGEC
FRESH 52WK HIGH
8% 💚

785

PRAJ INDS

FRESH ATH

566

PRAJ INDS

FRESH ATH

566 💚

ANNAPURNA SWADHISHT

CMP - 305

Support @ 280

Good opportunity to add on Dips

ADSL

Today's Low again @ 146.45

Consolidating Near about 145 to 154 zone

Watchout for close above 158 - 160 zone

🚀 Getting Ready to Launch soon

PRAJ INDS

YEST 14%

Fresh ATH

599

Journey towards 1⃣0⃣0⃣0⃣ ➕️

Marked witnessing profit 📈 booking after Sharp run up

Espically smallcap & Midcaps

Stay with only Quality stocks with Growth

ADSL

Giving opportunity to add for medium to longterm

Cmp - 133

Days Low - 132.4

One can loom forward to add

DEEPAK NITRITE

DAYS LOW - 2254

DAYS HIGH in Morning - 2349

Support @ 2235/2190

Waiting for close above 2360 for next leg of Rally