Vinati Organics - Operational Synergies To Further Solidify Leadership Position: Motilal Oswal

Motilal Oswal Report

Vinati Organics Ltd. has strengthened its operations through backward integration, which is expected to expand its margins. Additionally, its vertical integration, along with the Veeral Additives Ltd. merger, is likely to enhance economies of scale and help Vinati Organics maintain/expand its market share in ATBS and antioxidants.

Further, the commissioning of OSBP and DSBP plants positions Vinati Organics as the sole domestic producer, reducing India's import reliance.  With a 65% global market share in ATBS and IBB, Vinati Organics aims to expand its ATBS capacity by H2 FY25.

The company is also diversifying its portfolio through niche products and specialized polymers from Veeral Organics while advancing its sustainability strategy.

In FY24, the company added 11.5MW of solar power and is targeting an additional 6.5MW in FY25, further reducing its carbon footprint.

We continue to believe that Vinati Organics’ overall long-term growth outlook is healthy. The stock is trading at ~39 times FY26E EPS of Rs 54 and ~28x FY26E enterprise value/Ebitda.

It had a fixed asset turnover of 1.5 times as of FY24. We value the company at 45 times Sep’26E EPS to arrive at a target price of Rs 2,500. We reiterate our Buy rating on the stock.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.