Vinati Organics Q1 Results Review - Slow Start Led By Muted Performance Of The Legacy Portfolio: Nirmal Bang

Nirmal Bang Report

Vinati Organics Ltd.’s Q1 FY25 Ebitda came in ~19% below our estimate on account of lower than expected growth and unfavorable mix change. Ebitda margin improved by 88 basis points mainly led by savings in overheads and operating leverage.

Pickup in the legacy portfolio (including ATBS) along with ramp up of upcoming projects in H2 FY25 remain key monitorable. Any delay in project commissioning and/or scale up might defer the growth.

Vinati Organics' Ebitda has grown at a CAGR of 2% over the last five years (cumulative capex Rs 13 billion). While upcoming projects and expansion of the existing portfolio present a promising case for earnings acceleration, demand recovery and competitive intensity in AOs, MEHQ, Anisole, etc. remains the key.

Also, incremental return on capital employed could be lower than the legacy portfolio. Maintain Sell with a revised target price of Rs 1,520 (26 times PE) after rolling forward valuation to June-26E).

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.