Hold Vinati Organics; target of Rs 1626: Prabhudas Lilladher

Prabhudas Lilladher's research report on Vinati Organics

We recently met with the management of Vinati Organics (VO IN). Based on our interaction, Q4FY24 performance is expected to be slightly better than Q3FY24, but significant improvement will be visible only in FY25. Destocking is largely over and ATBS, IBB, IB and Butyl phenols plants have ramped up their capacity utilization. Throughout this year, the company will be commencing several projects, including MEHQ and Guaiacol production this month. Anisole plant is expected by 2024-end, until which, it would be sourced externally. ATBS expansion is scheduled for completion in Dec’24.

Outlook

Currently, the stock is trading at ~45x FY25 P/E. We upgrade the stock to HOLD from REDUCE rating previously with a target price of Rs1,626, valuing it at 38x FY26E EPS.

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Vinati Organics - 05032024 - prabhu