Ace investor Mukul Agrawal has invested in Deepak Fertilisers and Petrochemicals Corporation Ltd. (DFPCL), a leading player in India’s fertiliser and chemical sectors. In the second quarter of 2024 (Q2FY25), Agrawal bought 15 lakh shares, which is a 1.19% stake in the company. This marks his first appearance as a shareholder in DFPCL this year, suggesting that he previously held no shares or his stake was too small to be reported.
Agrawal’s investment comes as Deepak Fertilisers’ stock has seen a 45% rise so far in 2024. Last year, the stock gained close to 50%, driven by the company’s strong fundamentals and growth strategies.
Institutional Interest and Changing Ownership
Institutional investors like banks, mutual funds, and insurance companies also increased their holdings in Deepak Fertilisers. They now own a 10.02% stake, up from 6.3% in the previous quarter. This shows rising confidence in the company’s growth potential. Meanwhile, foreign institutional investors (FIIs) slightly reduced their holdings but still maintain a strong interest with a 9.67% stake.
Stock’s Bullish Performance
Deepak Fertilisers has been on a strong upward trend, gaining nearly 50% over the past year. The stock has consistently risen month after month in 2024, including a 7.6% rise in October. It reached its highest point in early October, though it is currently trading 15% below its peak.
Brokerage View: ‘Hold’ Rating Despite Strong Gains
Despite the stock’s impressive performance, MarketsMOJO downgraded it from a ‘Buy’ to a ‘Hold’ rating in October 2024, citing concerns over falling profits and high debt. Deepak Fertilisers’ profit dropped by 40.4%, and the company’s debt-to-EBITDA ratio is high at 2.73 times, raising concerns about its ability to manage debt.
Though the company’s profitability is under pressure, Deepak Fertilisers remains a key player in India’s fertiliser and petrochemical market, which is expected to grow significantly in the coming years.
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