Share price of Deepak Nitrite skyrockets today: Here are the reasons

The stock price of Deepak Nitrite Ltd., an Indian chemical manufacturing company, surged by nearly 10 per cent today (May 24) after the market opened. The price surged after the news came that a subsidiary of Deepak Nitrite, namely Deepak Chemical Technology, had signed an MoU with the state government of Gujarat and an investment amount of Rs 5,000 crore had been decided for the next four years. The company will build new chemical plants in the state, primarily for specialty chemicals like phenol and acetone.

The company is largely involved in the import of such chemicals. In most of their plants for such specialty chemicals, they have traded at 100 per cent or more. As per the brokerage report, the valuation will further go up after the company produces more specialty chemicals from the new plants.

The share price of the company opened at Rs 1,948 on Wednesday morning and touched a high of Rs 2,160. It closed at Rs 1,950.05 on Tuesday (May 23).

Analysts at Zee Business suggested that the shares of the company would give good returns in the long term. The analysts also expect the profit to grow in the coming quarters due to their production efficiency.

In its filing, the company mentioned, "The proposed investment is expected to generate around 1,500 direct and indirect employment opportunities. The proposed investment will also help reduce India's import bill."

The proposed investment is anticipated to create about 1,500 direct and indirect job possibilities, the company stated in an exchange filing.

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