Deepak Nitrite share price falls over 14% to hit 52-week low post Q3 results

Deepak Nitrite’s share price witnessed a significant drop of over 14% on Friday, February 14, 2025, hitting a fresh 52-week low of ₹1,921.40 on the BSE. This decline follows the company’s disappointing third-quarter (Q3) financial results for FY25. 

The stock has been under considerable pressure, falling 16.5% in the past month and nearly 22% year-to-date (YTD). Over the last six months, the stock has declined by 31%, while its one-year performance shows a drop of over 13%.

Weak Q3 financial performance

Deepak Nitrite reported a sharp 51.5% decline in its consolidated net profit for Q3FY25, which stood at ₹98.09 crores compared to ₹202.05 crores in the same quarter last year. The company’s consolidated revenue from operations also fell by 5.3% to ₹1,903.40 crores from ₹2,009.23 crores in the corresponding period of the previous fiscal year.

At the operational level, the company’s earnings before interest, tax, depreciation, and amortization (EBITDA) plunged 44.7% to ₹168.5 crores in Q3FY25, down from ₹304.6 crores in the year-ago quarter. The EBITDA margin contracted significantly to 8.9% from 15.2% year-on-year (YoY), primarily due to higher costs and lower realizations.

Industry outlook and company guidance

Despite the challenging quarter, Deepak Nitrite remains cautiously optimistic about the future. In its investor presentation, the company highlighted initial signs of improved demand from international customers. 

It also expects domestic demand to normalize from the fourth quarter onwards. Additionally, certain intermediates that experienced transient feedstock price increases are anticipated to see margin expansion as raw material costs ease.

Technical analysis and market sentiment

Deepak Nitrite’s stock appears to be in oversold territory on both daily and weekly timeframe charts. Market analysts suggest that a technical rebound could be on the horizon. However, traders are advised to wait for the downside to stabilize before considering any moves. The current recommendation is to utilize any potential rebound as an opportunity to exit or sell the stock.

Should investors buy on dips or sell?

The sharp correction in Deepak Nitrite’s share price has left investors questioning whether to invest in stocks at the current dip or cut their losses. While the stock’s oversold status hints at a possible rebound, the weak Q3 performance and broader market challenges suggest caution for those considering whether to invest in stocks at this juncture.

Closing market update

As of 10:35 AM on February 14, 2025, Deepak Nitrite shares were trading 13.94% lower at ₹1,925.00 on the BSE. The stock’s performance continues to reflect the market’s reaction to its recent financial results and the broader challenges facing the chemical industry.