Morgan Stanley upgraded the stock from "underweight" to "overweight" and raised the price target to ₹2,985 from ₹1,625.
New investment cycle could drive further re-rating for the stock.
The company aims to double its base earnings by 2028 by becoming an integrated, downstream phenolics producer.
Deepak Nitrite's multi-year pipeline of nearly $1 billion in investments has begun, leading to expanded multiples compared to global chemical peers.
The brokerage expects outperformance due to the company's strong operating metrics and anticipated earnings from new investments.
Risks include project delays, slow execution, and sluggish earnings.