Buy Vinati Organics; target of Rs 2180: Motilal Oswal

BUY

Motilal Oswal's research report on Vinati Organics

Vinati Organics (VO) reported a strong operated performance in 1QFY26, as EBITDA surged 33% YoY to INR1.7b. Gross margin expanded 710bp to 52%, while EBITDAM expanded 670bp YoY to 30.6%. PAT grew 31% YoY to INR1.1b (our est. INR940m). For FY26, VO is targeting revenue growth across ATBS, BP, and AO segments, supported by favorable demand trends and capacity additions. The company has guided for a 20% CAGR in revenue over the next three years and aims for EBITDAM of 26-27% in FY26.We largely maintain our earnings estimates for FY26/FY27. We value VO at 37x FY27E EPS to arrive at a TP of INR2,180. We reiterate our BUY rating on the stock.

Outlook

We broadly maintain our FY26/FY27 estimates and expect a CAGR of 20%/25%/25% in revenue/EBITDA/PAT over FY26-27. The stock trades at ~27x FY27E EPS of INR62.2 and ~19x FY27E EV/EBITDA. We value the stock at 35x FY27E EPS to arrive at a TP of INR2,180. Reiterate BUY.

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