IIFL Securities Stock Idea: Buy Deepak Fertilizers & Petr with Target Rs 1035

IIFL Securities has a buy recommendation for Deepak Fertilizers & Petrochemicals at the current market price of Rs 1006.45. The target price set for the stock is Rs 1035, implying an upside potential of approximately 2.8%. This bullish view is based on the company's strong financial performance, its dominant position in the domestic fertilizer market, and its plans for capacity expansion.

About Deepak Fertilizers & Petr:

Deepak Fertilizers and Petrochemicals Corporation Limited (DFPCL) is a prominent Indian chemical company incorporated in 1979. It is a part of the Deepak Group and is primarily engaged in manufacturing and marketing fertilizers, petrochemicals, and industrial chemicals. DFPCL has a wide product portfolio, including fertilizers like urea, DAP, and NPK, as well as petrochemicals such as LAB, SM, and PE. The company has a strong distribution network across India and exports its products to various countries around the world. DFPCL operates manufacturing facilities in Taloja, Dahej, and Sikandrabad. It has a market capitalization of around INR 24,000 crores as of 2023.

52 Week Price Trend:

Deepak Fertilizers & Petrochemicals Corporation (DEEPAKFERT) is currently trading at Rs 1006.45, significantly above its 52-week low of Rs 483.35 but below its 52-week high of Rs 715. This indicates a moderate upside potential in the near term. The company's financial performance has been mixed, with revenue growth but declining margins. Analysts remain cautious, with some recommending a hold strategy while others suggest considering it at lower levels. Investors should carefully assess the company's fundamentals and market conditions before making investment decisions.

Stratzy's MOST Analysis:

Based on Stratzy's MOST framework, DEEPAKFERT has been assigned a rating of BB-. This rating is determined by evaluating four key factors: Management, Outlook, Safety, and Trend. The BB- rating indicates that DEEPAKFERT has a medium level of fundamental risks. This overall score suggests that while DEEPAKFERT may present some areas of concern, it also has strengths that warrant consideration for potential investment opportunities.

Company's Fundamentals:

Deepak Fertilizers & Petr (NSE: DEEPAKFERT) is currently trading at a Stock PE of 13.37, indicating that investors are willing to pay ₹13.37 for every ₹1 of earnings per share. The PB Ratio of 1.24 suggests that the company's market value is 1.24 times its book value, indicating that it is slightly overvalued. The Dividend Yield of 1.96% implies that investors can expect to receive ₹1.96 in dividends for every ₹100 invested in the stock. Overall, these metrics suggest that the stock is fairly valued and offers a modest dividend yield.

Fundamental and Technical information provided in this blog were last updated on 07 Aug, 2024

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