Deepak Nitrite Shares Surge 10% On Rs 5,000 Crore Capex Plan
The project is to set up a facility to manufacture specialty chemicals at Dahej and Nandesari in Gujarat.
Shares of Deepak Nitrite Ltd. surged 10% intraday on Wednesday after its unit agreed to invest around Rs 5,000 crore in Gujarat over the next four years.
Deepak Chem Tech Ltd. signed an agreement to set up a facility to manufacture specialty chemicals—phenol, acetone and bisphenol—at Dahej and Nandesari in Gujarat. The proposed investment is expected to generate around 1,500 direct and indirect employment opportunities.
Specialty chemicals cater to demands in the agrochemical and pharmaceutical industries. Phenol and acetone are used in segments like laminates, plywood, pharma, paint, and adhesives. Bisphenol caters to epoxy, adhesives and polycarbonate, which have various applications across automotive, electronic and consumer goods, defense and medical equipment.
Shares of Deepak Nitrite surged 10% as of 3 p.m., as compared with a 0.38% decline in the benchmark NSE Nifty 50.
The stock gained the most since March 1, 2021. Total traded volume stood at 11 times its 30-day average. The relative strength index was at 78, implying that the stock may be overbought.
Out of the 17 analysts tracking the company, 11 maintain a 'buy', three recommend a 'hold' and three suggest a 'sell' on the stock, according to Bloomberg data. The average 12-month consensus price target implies a potential downside of 1%.