Accumulate Vinati Organics; target of Rs 1934: Prabhudas Lilladher

Prabhudas Lilladher's research report on Vinati Organics

Vinati Organics (VO IN) reported revenue of Rs5.2bn in Q3FY25, reflecting a 16.4% YoY increase, but a 5.7% QoQ decline largely due to seasonal factors. The company remains optimistic about a strong Q4FY25 and has maintained its 20% revenue growth target for FY25. ATBS, the company’s key high-margin product, contributed 39% of total revenue in Q3FY25, up from 36% in Q2FY25. This rising contribution has driven margin expansion, with further improvements expected as ATBS expansion comes online. Antioxidants revenue, projected to double in FY25 from Rs1.3bn in FY24, reached Rs1.6bn in 9MFY25. MEHQ and guaiacol, launched in Mar’24, are expected to make a meaningful revenue contribution from FY26, with a peak potential of Rs4bn. ATBS capacity expansion and additional antioxidant launches are on track. As ATBS expansion aligns with growing demand and contributions from new products rise, we expect an improvement in the company’s performance.

Outlook

The stock currently trades at 37x FY27 EPS. We maintain ‘Accumulate’ rating with a revised target price of Rs1,934, valuing it at 41x FY27 EPS.