Accumulate Vinati Organics target of Rs 2055: Prabhudas Lilladher

Prabhudas Lilladher's research report on Vinati Organics

Vinati Organics (VO IN) reported a topline of Rs5.53bn, reflecting 19.5% YoY and 5.4% QoQ growth. It has maintained 20% revenue growth guidance for FY25. ATBS, the company’s key product, contributed to 36% of total revenue in Q2FY25. Antioxidants segment revenue, which is expected to double in FY25 from Rs1.3bn in FY24, stood at Rs1bn in H1FY25. The company commenced commercial production of MEHQ and guaiacol in Mar’24, and samples have been sent to customers for approval. These products are expected to meaningfully contribute to revenue from FY26. Several key projects, including ATBS expansion, setting up of phenol plant, and launch of additional antioxidants, are on track and anticipated to come online in H2FY25. We expect the company's performance to improve as the ATBS expansion aligns with growing demand. Furthermore, contribution from newly launched products is expected to rise.

Outlook

The stock currently trades at 41x FY27 EPS. We maintain ‘Accumulate’ rating on the stock, with a revised target price of Rs 2,055, valuing it at 48x FY27/FY26E.