Buy Vinati Organics; target of Rs 2091: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Vinati Organics has recommended buy rating on the stock with a target price of Rs 2091 in its research report dated August 18, 2025.

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August 21, 2025 / 15:27 IST

buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Vinati Organics

Due to the recent correction in stock performance along with strong visibility from ATBS, new product ramp-up, and capacity expansion, we upgraded Vinati Organics (VO IN) to ‘BUY’ with a target price of Rs2,091, valuing the stock at 40x FY27 EPS. The company reported revenue of Rs5.4bn in Q1FY26, reflecting a modest 3.3% YoY increase but a sharp 16% sequential decline. Management has guided for ~15% revenue growth in FY26, led by an expected 20% increase in volumes, with EBITDA margins projected at ~27%. ATBS, the company’s flagship high-margin product, continued to deliver robust growth and remains oversold, likely to be supported by rising demand from the oil & gas sector where it is used as a tertiary oil recovery agent. Phase I of the ATBS capacity expansion has been completed, while Phase II is scheduled to come online in April’26. In the Antioxidants (AOs) segment, demand remains healthy though pricing pressure persists due to competition from China and Singapore. New products such as MEHQ and Guaiacol did not contribute meaningfully in Q1, but are expected to ramp up in FY26, with a combined peak revenue potential of ~Rs4bn.

Outlook

Additionally, upcoming product launches including anisole, 4MAP, TAA, and PTAP, expected in Q2FY26 and Q3FY26 are likely to strengthen the growth trajectory. We upgraded the stock to ‘BUY’. The stock is currently trading at 32x FY27 EPS.

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