SESHADRIPURAM EDUCATIONAL TRUST

SESHADRIPURAM INSTITUTE OF COMMERCE AND MANAGEMENT

(Affiliated to Bengaluru City University) (AICTE Approved)
NAAC Accredited ‘A’ Grade; ISO Certified 9001:2015
# 40, Girls’ School Street, Seshadripuram, Bengaluru-560020.
Ph: 080-22955382 Fax: 080-23462472: info@sicm.edu.in www.sicm.edu.in

Subject: -
SECURITY ANALYSIS AND PORTFOLIO
MANAGEMENT

Topic on: -
ANALYSIS OF DEEPAK FERT LTD STOCK

Collected by: -
SURAJ N
RAJAGURU M U
SUJAL R GANJAM
RAHUL RAJ SINGH
BHARATH R.

Submitted to-
Assistant
Professor
Spandana V R
Department of Commerce and Management

1
DEEPAK FERT Stock Analysis

Current Performance (as of June 11, 2024)

Trading Price: ₹601.40 (up 1.06% from the opening
price) Market Cap: ₹7,667Cr
P/E Ratio: 17.33 (higher than sector average of 33.63)

Past Performance
1 Year: Up 6.44%
5 Years: Up 361.07%
Recent volatility: Up 7.73% in the last 7 days

Reasons for Stock Movement

 Overall Market Conditions: Broader market sentiment can significantly impact
stock prices.
 Industry Performance: The performance of the fertilizer and petrochemical sector
can affect DEEPAKFERT's stock.
 Company-Specific News: News about earnings, new projects, or management
changes can influence the stock price.
 Government Regulations: Government policies impacting the fertilizer
and petrochemical industry can affect the stock.
Factors to Consider

Company Financials:

 Profitability: Analyze profit margins, earnings growth, and return on equity (ROE) to
understand the company's efficiency and profitability. Recent profit growth is a positive
sign for DEEPAKFERT, but a declining ROE suggests a decrease in profitability
relative to shareholder equity.
 Debt Management: Look at the debt-to-equity ratio and recent debt reduction efforts.
DEEPAKFERT's focus on debt reduction is positive.
 Cash Flow Management: Evaluate the company's ability to generate cash flow to meet
its obligations and invest in future growth.

2
Industry Analysis:

 Industry Trends: Research current trends and challenges in the fertilizer and
petrochemical sector. Understanding the industry landscape can help assess
DEEPAKFERT's position and future prospects.
 Competition: Analyse DEEPAKFERT's competitors' performance and strategies. This
can provide insights into the competitive landscape and potential threats.
 Government Regulations: Stay updated on government policies impacting the fertilizer
and petrochemical industry, as these can affect DEEPAKFERT's operations and
profitability.

Valuation:

 P/E Ratio: Compare DEEPAKFERT's P/E ratio with the industry average to assess
potential undervaluation. The current P/E ratio suggests DEEPAKFERT might be
undervalued.
 Price-to-Book Ratio: Analyse this ratio to assess the company's stock price relative to
its book value.

Future Outlook:

 Company Plans: Research DEEPAKFERT's future plans for expansion, product

diversification, or cost-cutting measures. These can impact future growth and
profitability.
 Overall Market Conditions: Consider the broader market sentiment and potential
economic factors that can influence the stock price.

3
Overall

Past Performance (2019-2024):

 Sales Growth: Slow and negative overall (-5.91% average).

 Profit Growth: Positive trend (20.88% average).
 Stock Price: Generally positive trend since 2019, but down 14.81% YTD (as
of June 11, 2024).

*Remember: Past performance doesn't guarantee future results.

4
Financial Highlights:
 P/E Ratio: 14.38 (potentially undervalued compared to the industry average)
 Debt-to-Equity Ratio: Significantly improved, indicating a stronger financial
position.
 Cash Flow Management: Strong, suggesting efficient use of resources.
 Profitability: Analyze recent profit margins and earnings growth to understand
profitability trends.
 Return on Equity (ROE): While profit growth is positive, a declining ROE might
indicate a decrease in profitability relative to shareholder equity.

Strengths:
 Profitability: DEEPAKFERT has shown good profit growth, especially in the last 3
years (over 111%). This indicates efficiency in generating profits.
 Financial Stability: The company boasts a healthy debt-to-equity ratio and strong cash
flow management, suggesting a strong financial position.
 Potential Undervaluation: The P/E ratio (14.38) being lower than the industry average
suggests DEEPAKFERT might be undervalued.

Weaknesses:
 Slow Sales Growth: Sales growth has been slow and even negative over the past five
years, at an average of -5.91%. This raises concerns about future revenue generation.
 Declining ROE: The Return on Equity (ROE) has been declining over the past five
years, currently at 10.18%. This suggests a decrease in profitability relative to
shareholder equity.
 Volatile Stock Price: The stock price has shown some volatility in 2024, with a current
year-to-date decline of 14.81%.

Analyst Opinions:

5
Deepak Fertilisers and Petrochemicals Limited year by year from 2019 to 2024:

1. 2019: You would need to look at the company's financial reports, market news, and industry
trends to assess its performance during this year. Factors such as revenue growth, profit
margins, and market share could provide insights.

2. 2020: This year might have been impacted by the COVID-19 pandemic, affecting global
markets and industries. Analyze how Deepak Fertilisers and Petrochemicals navigated through
the challenges, any strategic shifts they made, and the overall market sentiment towards the
company.

3. 2021: With the pandemic still ongoing but with adjustments made by many companies,
including Deepak Fertilisers and Petrochemicals, this year's performance could show signs of
recovery or adaptation to the new normal. Look for any significant developments, expansions,
or changes in market positioning.

4. 2022: By this year, the effects of the pandemic might have started to subside, or companies
like Deepak Fertilisers and Petrochemicals could have fully adjusted to the new business
environment. Assess their performance in terms of growth, profitability, and market
competitiveness.

5. 2023: This year's performance could reflect the company's ability to capitalize on
opportunities and navigate challenges in a post-pandemic world. Look for any new product
launches, partnerships, or acquisitions that might have impacted their performance.

6. 2024: Analyze the company's performance in the current year, considering any
macroeconomic factors, industry trends, and company-specific developments. Look for signs of
continued growth, innovation, and sustainability in their operations.

By examining these factors year by year, you can gain a better understanding of Deepak
Fertilisers and Petrochemicals Limited's overall trend from 2019 to 2024.

6
Additional Notes:
 Industry Trends: The performance of the fertilizer and petrochemical sector can
significantly impact DEEPAKFERT. Researching industry trends, challenges, and
outlooks can provide valuable context.
 Government Regulations: Government policies affecting the fertilizer and
petrochemical industry can influence DEEPAKFERT's operations and profitability. Stay
updated on relevant regulations.
 Future Plans: Analyze DEEPAKFERT's plans for expansion, product diversification,
or cost-cutting measures. These can impact future growth and profitability.
 Management Team: Research the experience and track record of DEEPAKFERT's
management team. Their capabilities and strategies can influence the
company's success.

7
Future Plans for Debt Reduction:
 Annual Reports: These reports often outline future plans and strategies, including debt
management goals. You can find them on DEEPAKFERT's website or financial
databases.
 Company Filings: DEEPAKFERT might disclose future debt plans in regulatory filings
with the Securities and Exchange Board of India (SEBI).
 Press Releases or News Articles: The company might announce future debt reduction
plans through press releases or news articles. You can search for DEEPAKFERT news
to find relevant information.

 Analyst Reports: Some analyst reports might discuss DEEPAKFERT's debt situation
and potential future plans. However, these reports might require a subscription to access.

Deepak Fert Ltd.'s Future Plans:

Deepak Fertilisers and Petrochemicals' new plans for the upcoming year:

1. Expansion into new markets: The company might plan to enter new geographical regions
to diversify its revenue streams and tap into emerging opportunities.

2. Product diversification: Deepak Fertilisers and Petrochemicals could be considering

expanding its product portfolio by introducing new fertilizers, chemicals, or petrochemical
products to meet evolving market demands.

3. Sustainability initiatives: Expectations for environmental sustainability continue to rise.

The company may outline plans to invest in eco-friendly practices, such as reducing carbon
emissions, improving water management, or implementing renewable energy solutions.

4. Digital transformation: Embracing digital technologies can enhance operational efficiency

and competitiveness. Look for initiatives related to digitalization, such as automation in
manufacturing processes, implementation of data analytics for decision-making, or enhancing
customer engagement through digital channels.

5. Strategic partnerships: Collaborations with other companies or research institutions can

unlock synergies and accelerate growth. Deepak Fertilisers and Petrochemicals might

8
 announce strategic partnerships aimed at expanding market reach, accessing new technologies,
or sharing expertise.

6. Capital expenditure plans: Investment in infrastructure, capacity expansion, or technology

upgrades may be on the agenda to support future growth objectives. Details on capital
expenditure allocations and expected returns could be disclosed.

These points provide a glimpse into potential areas of focus for Deepak Fertilisers and
Petrochemicals in the upcoming year. Actual plans and initiatives would be outlined by the
company based on its strategic priorities and market conditions.