126 Per cent Mutlibagger Returns in a Year: This Fertiliser Company Turned out as a Top Performing stock in Nifty 500 pack – Know What is Driving the Stock Price?

The stock has delivered 16.83 per cent gains in the last five days and its one-year return stands at multibagger 126.12 per cent.

Deepak Fertilisers and Petrochemicals Corporation has seen a sharp rise in its share price, gaining around 20 per cent in the month till date. The stock is approaching its all-time high, driven by strong financial performance, strategic initiatives, and expansion plans.

The stock has delivered 16.83 per cent gains in the last five days and its one-year return stands at multibagger 126.12 per cent.

The company reported a 237 per cent year-on-year (YoY) growth in net profit for Q2FY25, reaching Rs 210 crore compared to Rs 60 crore in the same quarter last year. Revenue grew 13.3 per cent YoY to Rs 2,750 crore, supported by higher demand in both agricultural and industrial segments. EBITDA saw a 72.8 per cent YoY increase to Rs 490 crore, with margins expanding from 12 per cent to 18 per cent.

In Q3FY25 the company posted a more-than-four-fold rise in its quarterly profit aided by strong demand for its crop nutrition products and higher margins. The company's consolidated net profit increased to Rs 251 crore in the third quarter, from Rs 57.56 crore a year earlier. Deepak Fertiliser's earnings before interest, taxes, depreciation and amortization (EBITDA) surged 72 per cent, with margins increasing about 18 per cent. The company said revenue in its crop nutrition business surged 55 per cent, as an above-average monsoon improved crop yields.

The company's chemicals business posted a relatively smaller 22 per cent increase in revenue, which tempered overall revenue growth to 39.2 per cent to a total of Rs 2,579 crore from a year ago. Deepak Fertilisers' year-ago results were impacted due to higher inventories, squeezing sales and profit.

Deepak Fertilisers has undertaken several strategic initiatives to strengthen its growth trajectory. The company is aligning its business with India’s infrastructure sectors, such as coal, cement, and horticulture. Backward integration in ammonia manufacturing has helped reduce import dependency and improve margins. A shift towards specialty crop-based nutrition products is also reducing its exposure to commodity-based businesses. Additionally, the demerger of its mining chemicals, crop nutrition, and industrial chemicals business, approved by NCLT, is expected to be completed by year-end.

Capacity expansion remains a key driver for the company. The upcoming Technical Ammonium Nitrate (TAN) facility in Gopalpur will increase capacity by 376 KTPA by H2FY26, positioning Deepak Fertilisers as the third-largest TAN producer globally. Similarly, the Dahej nitric acid plant with a capacity of 450 KTPA will make the company the largest nitric acid producer in Asia.

Deepak Fertilisers’ share price is rising due to its strong earnings growth, strategic business realignment, and capacity expansion. The company’s focus on specialty products, backward integration, and demerger plans positions it for long-term growth.

Disclaimer: The article is for informational purposes only and not investment advice.