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Last Updated : Sep 18, 2018 01:47 PM IST | Source: Moneycontrol.com

Hold Vinati Organics; target of Rs 1384: Geojit

Geojit recommended hold rating on Vinati Organics with a target price of Rs 1384 in its research report dated August 13, 2018.

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Geojit's research report on Vinati Organics


Vinati Organics Ltd (VOL) enjoys global leadership in two speciality chemicals, with market share of 70% in IBB and 80% in ATBS. Revenue and PAT grew by 43.9% YoY & 107% YoY led by strong traction in ATBS and customised products. EBITDA margins improved by 740bps YoY to 34.7% due to better product mix and benefits of scale. Led by robust demand for IBB & ATBS in FY19E and pick-up in customised products, we expect current growth momentum to continue. Earnings outlook has significantly improved led by capacity expansion in ATBS and launch of new products in next 1-2 years. We upgrade our earnings estimates by 13% & 21% for FY19 & FY20E. Consequently, earnings to grow at 33% CAGR over FY18-FY20E.


Outlook


Given strong earnings outlook and RoE of 26% (last 5yrs), we value VOL at 28x (27x earlier) on FY20E. However, we downgrade to “Hold” from Buy with a target price of Rs1,384 given sharp up-move in stock prices.


For all recommendations report, click here


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First Published on Aug 16, 2018 04:16 pm
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