Buy Vinati Organics; target of Rs 2100: Motilal Oswal

Motilal Oswal's research report on Vinati Organics

Vinati Organics (VO) reported a strong operating performance in 2QFY26, as EBITDA surged 33% YoY to INR1.8b. Gross margin expanded to 56.5% from 45.8% in 2QFY25, while EBITDAM expanded 850bp YoY to 32.7%. PAT grew 22% YoY to INR1.3b (est. in line). For FY26, VO expects revenue growth across ATBS, Butyl Phenols (BP), and Anti-Oxidants (AO) segments, supported by favorable demand trends and capacity additions. VO has completed the phase 1 expansion of its Acrylamide Tertiary-Butyl Sulfonic Acid (ATBS) production capacity by 10,000mtpa to cater to the growing global demand and reduce order backlogs.

Outlook

We broadly maintain our FY26/FY27/FY28 estimates and expect a CAGR of 21%/35%/33% in revenue/EBITDA/PAT over FY26-28. The stock trades at ~27x FY27E EPS of INR61 and ~19x FY27E EV/EBITDA. We value the stock at 35x FY27E EPS to arrive at a TP of INR2,100. Reiterate BUY.