
For all the long-term investors, the performance of Vinati Organics stock has been quite phenomenal. Shares of this midcap company have zoomed over 3,500 per cent in the last 10 years.
Notably, brokerages have maintained their bullish stance on the stock after the company posted its earnings for the quarter ended September 2022.
The company's net profit jumped 43 per cent to Rs 116 crore in the quarter ended September 2022 as against Rs 81 crore during the previous quarter ended September 2021. Net Sales rose 51 per cent to Rs 566.29 crore from Rs 374 crore same quarter last year.
Sharekhan said Vinati Organics’ dominant global market share in ATBS/IBB segments, niche product portfolio, capacity expansion/new product launches and massive export opportunity in the speciality chemical sector would drive sustained long-term high double-digit earnings growth. It has a 'Buy' call with a target price of Rs 2,500.
While suggesting a target of Rs 2,300, Nirmal Bang said VO is one of the very few companies from its coverage universe wherein it sees potential of 25 per cent EBITDA CAGR over the next five -years, backed by a strong track record, process innovation thrust and sound financials. While the margin profile might look tight for VO in the near future, the addition of ROCE-accretive projects will ensure an efficient capital allocation strategy, it added.
According to Geojit, the company's revenue growth momentum is expected to continue, given the strong demand for its key products, capacity expansion and higher contribution from new products. It values the company at a P/E of 38x on FY24E and has upgraded the rating to 'Buy' from 'Accumulate' with a target price of Rs 2,360.
"Vinati Organics Limited enjoys distinctive positioning by being a market leader in its two key products, viz, in 2- Acrylamido 2 Methylpropane Sulfonic Acid (ATBS) and Isobutyl Benzene (IBB) in the global market commanding more than 65% of the market share for both these products," Anuj Jain, Research Head and Co-Founder at Green Portfolio told Business Today.
"With strong balance sheet, robust margins and timely expansion via new and existing products justifies premium valuation. However, the short-term upside may be capped. In long term, the company looks like a promising story," Jain added.
Motilal Oswal believes that the demand outlook for the ATBS segment will remain quite strong going forward in the second half as well as for FY24. "We value the company at 40x FY24E EPS to arrive at our target price of Rs 2, 500. We reiterate our Buy rating on the stock," it said.
At 11:25 hours, the shares were trading 0.03 per cent lower at Rs 2115.85 on BSE.
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