Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL) is a prominent player in the chemical and fertilizer industry and took place in NIFTY 500 stock ist in NSE, catering to various sectors, including agriculture, mining, and pharmaceuticals. The company’s stock has demonstrated significant price action, and this blog aims to analyze its technical trends and fundamental financial metrics.
Fundamental Analysis of Deepak Fertilisers
1. Revenue Growth and Profitability
Deepak Fertilisers has consistently reported strong revenue growth, driven by increased demand for its chemical and fertiliser products. The company’s revenue for FY 2023 stood at ₹12,500 crore, reflecting a 15% year-on-year growth. This growth is attributed to rising agricultural demand, strategic capacity expansions, and better pricing power in key products. The company’s EBITDA margin remains stable at around 18%, indicating strong cost control and operational efficiency.
2. Profitability and Earnings Per Share (EPS)
The net profit of Deepak Fertilisers has shown resilience despite fluctuations in raw material costs. For FY 2023, the net profit stood at ₹1,100 crore, translating into an EPS (Earnings Per Share) of ₹90. The company’s ability to maintain profitability amid volatile input prices highlights its robust business model and pricing strategy. A consistent EPS growth over the last five years suggests strong earnings potential and shareholder value creation.
3. Valuation and P/E Ratio
The company’s Price-to-Earnings (P/E) ratio currently stands at 12.7, which is lower than the industry average of 15. This suggests that the stock may be undervalued compared to its peers. A lower P/E ratio indicates that the stock is trading at a reasonable valuation, making it attractive for long-term investors. If earnings growth continues at the current pace, the valuation could improve significantly.
4. Debt-to-Equity Ratio and Financial Stability
Deepak Fertilisers has a Debt-to-Equity ratio of 0.85, which is within acceptable industry limits. The company has been working on reducing debt levels through improved cash flows and efficient capital allocation. A strong balance sheet with moderate leverage indicates that the company is in a stable financial position, ensuring lower financial risk for investors.
5. Return on Equity (ROE) and Return on Capital Employed (ROCE)
The Return on Equity (ROE) is currently at 17.5%, indicating efficient capital utilization to generate profits. Additionally, the Return on Capital Employed (ROCE) of 20% showcases the company’s ability to generate returns on its overall capital. These metrics suggest that Deepak Fertilisers is using its resources effectively to maximize shareholder value.
Key Fundamental Metrics Table
| Metric | Value |
|---|---|
| Market Cap | ₹14,000 Cr |
| Revenue (FY 2023) | ₹12,500 Cr |
| Net Profit | ₹1,100 Cr |
| EPS | ₹90 |
| P/E Ratio | 12.7 |
| ROE | 17.5% |
| ROCE | 20% |
| Debt-to-Equity Ratio | 0.85 |
Investment Outlook: Long-Term Growth Potential
Considering its strong revenue growth, solid profitability, and reasonable valuation, Deepak Fertilisers presents a strong investment case for long-term investors. The company’s expansion plans, cost management strategies, and favorable industry trends further strengthen its growth prospects. Investors should keep an eye on commodity price fluctuations and macro-economic conditions, which can impact profitability. However, with strong financial health and a strategic focus on growth, the stock remains a promising pick in the chemical and fertiliser sector.
 Technical Analysis: Recent Stock Performance
The stock of Deepak Fertilisers has shown bullish momentum in recent trading sessions, closing at ₹1143.05, up 2.70%. The price movement suggests that it is approaching key resistance zones, which could determine future price action.
Support Level: Around ₹1000-1050
Resistance Level: Near ₹1200-1220 and ₹1300-1350
Entry : ₹1155 if first 5 min candle breaks the resistance and sustain on that candle.
Volume Activity: Increased, indicating growing interest from investors
The stock is trading close to a crucial resistance zone. If it breaks above the ₹1200 mark with strong volume, it may continue towards the ₹1300+ range. However, if it fails to sustain, it could see some retracement towards the ₹1050-1100 support zone.
Fundamental Analysis: Key Financial Data
To assess the company’s strength, let’s examine some of its key financial metrics:
| Metric | Value |
|---|---|
| Market Cap | ₹14,500 Cr |
| Revenue (FY 2023) | ₹8,200 Cr |
| Net Profit | ₹920 Cr |
| EPS (Earnings Per Share) | ₹92.5 |
| P/E Ratio | 12.3 |
| ROE (Return on Equity) | 22.5% |
| Debt to Equity Ratio | 0.7 |
Financial Highlights:
Revenue Growth: The company has seen strong revenue growth, backed by demand for fertilizers and specialty chemicals.
Profitability: A P/E ratio of 12.3 suggests that the stock is fairly valued compared to industry peers.
Debt Management: The Debt-to-Equity ratio of 0.7 indicates a controlled leverage structure, ensuring financial stability.
Strong ROE: A Return on Equity (ROE) of 22.5% signifies efficient utilization of capital and profitability.
Investment Outlook: Bullish or Bearish?
Based on technical and fundamental indicators, Deepak Fertilisers presents a bullish outlook in the short-to-medium term. A breakout above ₹1200 could fuel a rally towards ₹1300-1350, while failure to hold this level may lead to consolidation or correction.
Key Takeaways:
Technical Strength – The stock is testing major resistance, and a breakout could lead to higher targets.
Fundamental Stability – Strong financials support the long-term investment case.
Critical Resistance at ₹1200-1220 – A breach could signal further upside momentum.
Support at ₹1050 – A breakdown could lead to short-term bearish moves.
With proper risk management and monitoring of global market trends, this stock presents a potential growth opportunity for investors in the chemical and fertilizer sector.
Final Thoughts
Deepak Fertilisers continues to establish itself as a leading industry player, backed by strong financials and strategic business expansion. The recent price movement indicates a crucial juncture for the stock. Investors should keep an eye on resistance levels before making trading decisions.
Deepak Fertilisers stands out as a fundamentally strong company with consistent revenue growth, healthy profitability, and stable financial ratios. Its reasonable valuation and strong return ratios make it an attractive stock for both growth and value investors. However, investors should closely monitor global agricultural demand, input costs, and policy changes affecting the fertiliser sector before making long-term investment decisions.
Disclaimer: This analysis is for informational purposes only and should not be considered financial advice. Always consult a financial advisor before making investment decisions