Deepak Fertilisers stock can rally 39% from here, says Emkay; stock up 3%

The brokerage cites Deepak Fertilisers' leadership in mining & industrial chemicals, strong position in water-soluble fertilisers as drivers of its bullish view

Emkay Global Financial Services has initiated coverage on Deepak Fertilisers with a ‘Buy’ rating, for a target of ₹2,000 per share, implying 39 per cent upside from the current levels.

 

At 9:38 AM, Deepak Fertilisers shares were trading 1.32 per cent higher at ₹1,431 per share. In comparison, BSE Sensex was flat per cent at 84,681.46. Intra-day the stock rose 3.3 per cent, logging a day’s high at ₹1,460 per share. 

 

The brokerage cites Deepak Fertilisers' leadership in mining and industrial chemicals, strong position in water-soluble fertilisers, and a clear shift from commodity to specialty products as key drivers of its bullish view.

 

Mining chemicals: TAN expansion and backward integration key growth levers

Deepak Fertiliser is India’s largest producer of technical ammonium nitrate (TAN), with total capacity expected to reach around 1 million metric tonnes (mmt) by FY26E, according to Emkay Global. The company has backward-integrated into ammonia with a 507 kilotonnes per annum (ktpa) plant commissioned in calendar year 2024, allowing it to capture value from natural gas upwards and reduce earnings volatility.

 

TAN demand remains strong, driven by critical sectors such as coal, limestone, and metals mining, as well as explosives. To tap this, the company has undertaken both brownfield and greenfield expansions. With an estimated 40 per cent domestic market share, the company enjoys pricing power and is increasingly shifting customers to total-cost-of-ownership (TCO) solutions across mining and infrastructure, Emkay noted.  CATCH STOCK MARKET LIVE UPDATES TODAY

Industrial chemicals: NA expansion to drive steady growth

In industrial chemicals, Deepak Fertilisers’ portfolio includes Iso Propyl Alcohol (IPA; 70 ktpa) and nitric acid (NA, 1,120 ktpa), where it holds key market share and maintains long-term contracts with large domestic customers, according to analysts.

 

The business is transitioning from commodities to specialty chemicals, with a focus on customer-centric offerings. In IPA, the company has introduced a pharma-grade variant, while in NA, it has launched solar-grade products to cater to higher-spec applications.

 

A major growth driver will be the planned 450 ktpa expansion in nitric acid capacity at Dahej by end-FY26, which would make Deepak Fertilisers the largest NA producer in Asia, according to the brokerage. The company is also exploring opportunities in solar photovoltaics and semiconductors, where demand for high-purity specialty chemicals is expected to rise on the back of higher public and private capex.

Crop nutrition: Specialty fertilisers and Haifa tie-up to support growth

Deepak Fertilisers is a market leader in bentonite sulphur and water-soluble fertilisers in India, with a strong foothold in Maharashtra, Gujarat and Karnataka, and is gradually expanding into other southern and northern states.

 

The brokerage notes that the company’s tie-up with the Haifa Group will support technology transfer and product innovation, helping promote high-performance specialty fertilisers and improve crop yields. This positions Deepak Fertilisers well to benefit from the shift toward branded, value-added crop nutrition solutions rather than bulk commoditised products.

Restructuring and valuation: Demerger-led value unlocking ahead

The company has restructured its operations into separate entities:

• Deepak Mining Solutions – mining chemicals
• Mahadhan Agritech- crop nutrition

The company plans to further demerge these businesses over the next 2–3 years, a move the brokerage believes will unlock value and lead to multiple re-rating across verticals, given their differing growth, risk, and return profiles.

 

The brokerage projects that TAN expansion at Gopalpur, nitric acid expansion at Dahej and pricing benefits from the Equinor ammonia contract will collectively drive at least 50 per cent Ebitda growth over FY26–28E.