Vinati Organics Q2 Results Review - Strong Performance: Geojit

Geojit Research Report

Vinati Organics Ltd.'s Q2 FY23 revenue grew by 51% YoY, led by a strong contribution from the  2-acrylamido 2-methylapropane sulphonic acid business, and healthy demand across products. ATBS witnessed strong growth led by higher realisation and healthy volume.

The  Isobutyl benzene segment continues to witness a revival led, by traction from its key customers and we expect this growth momentum to continue given the improved outlook for Ibuprofen. Overall demand across products has seen healthy growth.

Ebitda grew by 47% YoY, while margins fell by 80 basis points YoY to 25.8% due to increase in power and fuel costs. Despite this, profit after tax grew by 36% YoY.

Vinati Organics' revenue growth momentum is expected to continue, given strong demand for its key products, capacity expansion and higher contribution from new products.

Synergies owing to backward and forward integration, strong cash flows, healthy balance sheet and return on capital employed and return on equity of above 24% (five year average), instills confidence.

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