ICICI Direct has given Buy recommendation for Vinati Organics recommended buy rating on the stock with a target price of Rs 2270 in its research repo with a target price of Rs. 2270 in its research report issued on Nov 11, 2021

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 retain BUY rating on the back of better growth outlook from ATBS and newer products such as Butyl phenols and antioxidant. We value Vinati Organics at 50x P/E FY23E EPS to arrive at a revised target price of Rs 2270/share (earlier Rs 2300/share).

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