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Indian agricultural chemicals firm Deepak Fertilisers and Petrochemicals posted nearly a 16% fall in profit on Wednesday, dragged by muted performance in its mainstay chemicals segment.

Net profit fell to 2.15 billion rupees ($25.81 million) during the three months ended March 31 from 2.55 billion rupees a year earlier. Revenue from operations fell about 25.4% to 20.86 billion rupees, marking the company's fourth consecutive quarter of decline.

The company's chemicals segment which deals in products catering to sectors such as pharmaceuticals, agrochemicals, drugs and dye intermediates, among others, clocked a 9.4% drop in revenue.

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KEY CONTEXT

Factors such as excessive inventory in the domestic market, water scarcity in southern India and unfavourable subsidies hit the performance of agrochemical and fertiliser companies in the fourth quarter.

Analysts, however, expect above-average monsoon rainfall and more subsidies for chemicals during the financial year 2025 would help change the fortunes of firms like Deepak Fertilisers and Petrochemicals.

Peers Coromandel International and SRF also posted a decline in their quarterly earnings.

PEER COMPARISON

Valuation (next 12 months) Estimates (next 12 Analysts' sentiment

months)

RIC PE EV/EBITDA Revenue profit Mean # of Stock to Div yield (%)

growth% growth% rating* analysts price

target**

Deepak 9.54 6.10 16.50 NULL BUY 1 0.83 1.80

Fertilisers

and

Petrochemicals

Corp Ltd

Coromandel 18.92 12.15 6.70 14.92 BUY 9 0.98 0.96

International

Ltd

SRF Ltd 38.05 21.29 15.03 27.09 HOLD 25 0.98 0.31

Sumitomo 46.37 32.90 19.66 43.24 BUY 8 1.03 0.27

Chemical India

Ltd

* Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

JANUARY-MARCH STOCK PERFORMANCE

-- All data from LSEG

-- $1 = 83.1020 Indian rupees