ICICI Direct's research report on Vinati Organics
Vinati Organics is a leading manufacturer of specialty chemical and organic intermediaries with global market leadership in its two key products- 2- Acrylamido 2 Methylpropane Sulphonic Acid (ATBS) and Isobutyl Benzene (IBB). Starting with IBB and subsequent forays into IB, ATBS, Butyl phenols, the company is now moving towards antioxidants. The company has two manufacturing facilities at Mahad and Lote • In terms of revenue contribution, ATBS constitutes ~40-50% of overall revenue followed by IBB of 20-30% while the rest is from other segments such as IB, Butyl phenols and derivatives.
Outlook
We change our rating from HOLD to BUY as the strong outlook for ATBS and newer products justifies premium valuation and recent correction provides decent upside. We value Vinati Organics at 45x P/E FY24E EPS to arrive at a revised target price of Rs 2320/share (earlier Rs 2320/share).
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