Buy Vinati Organics; target of Rs 1950: Motilal Oswal

Buy

Motilal Oswal's research report on Vinati Organics

Vinati Organics (VO) reported lower-than-expected operating performance in 3QFY26, with EBITDA growth of 13% YoY to INR1.6b (est. INR1.8b). Gross margin expanded to 55.2% from 49.0% in 3QFY25, while it declined 130bp QoQ. EBITDAM expanded 300bp YoY to 30.4% (down 230bp QoQ). PAT grew 14% YoY to INR1.1b (down 16% QoQ).

Outlook

We broadly cut our FY26/FY27/FY28 EPS estimates by 6%/5%/5% and expect a CAGR of 11%/19%/18% in revenue/EBITDA/PAT over FY25-28. The stock trades at ~23x FY28E EPS of INR66 and ~16x FY27E EV/EBITDA. We value the stock at 30x FY28E EPS to arrive at a TP of INR1,950. Reiterate BUY.

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