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Buy Vinati organics; target of Rs 2154: Geojit

Geojit is bullish on Vinati organics has recommended buy rating on the stock with a target price of Rs 2154 in its research report dated June 27, 2022.

June 28, 2022 / 04:10 PM IST
 
 
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Geojit's research report on Vinati organics


Vinati Organics Ltd (VOL) enjoys global leadership in two specialty chemicals, with market share of 70% in IBB (isobutyl benzene) and 80% in ATBS (2-Acrylamindo 2-Methylpropane Sulfonic Acid). FY22 revenue grew by 69% YoY led by higher realization, better off-take from Butyl phenols and stable demand from other segments. EBITDA grew by 23% YoY, while margins fell by 1,007bps YoY to 27% due to higher input cost. Despite this PAT grew by 29% YoY. The long term outlook has significantly improved on account of capacity expansion and new product launches. Synergies owing to backward & forward integration, strong cash flows, healthy balance sheet and ROCE & ROE of above 23% (5yr avg.), we have a positive long term outlook on the stock.


Outlook


We value VOL at a P/E of 35x (4 year avg.) on FY24E, considering strong earnings outlook we upgrade to Buy with a target price of Rs2,154.


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At 16:01 hrs Vinati Organics was quoting at Rs 1,952.55, up Rs 84.95, or 4.55 percent.


It has touched an intraday high of Rs 1,965.00 and an intraday low of Rs 1,836.80.


It was trading with volumes of 4,413 shares, compared to its thirty day average of shares, a decrease of percent.


In the previous trading session, the share closed down 0.61 percent or Rs 11.55 at Rs 1,867.60.


The share touched its 52-week high Rs 2,289.55 and 52-week low Rs 1,675.00 on 25 April, 2022 and 24 February, 2022, respectively.


Currently, it is trading 14.72 percent below its 52-week high and 16.57 percent above its 52-week low.


Market capitalisation stands at Rs 20,068.71 crore.


For all recommendations report, click here


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first published: Jun 28, 2022 04:09 pm
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