Vinati Organics Ltd. share price target

Vinati Organics delivered a robust FY25, with an 18.3% year-on-year revenue increase, a 23.7% rise in operating profit, and a 25.8% surge in net profit. Growth was primarily driven by ATBS and Antioxidants.

Vinati Organics reported a strong Q4FY25 with revenue up 17.5% y-o-y, operating profit growth of 20.4% and net profit increase of 18.1% y-o-y.

Vinati Organics (VO)’s 4QFY25 revenue came in line at INR6.5b. Gross margin expanded 80bp YoY to 47.4%, while EBITDAM was up 100bp YoY at 28.3%. EBITDA increased 22% YoY to INR1.8b and PAT grew 22% to INR1.3b (our est. INR1.2b). All the key segments reported strong growth in FY25.

Vinati Organics (VO IN) reported revenue of Rs6.5bn in Q4FY25, marking a robust 17.8% YoY and 24% sequential increase. The management has reiterated its guidance of 20% revenue CAGR over the next 3 years, along with EBITDA margins in the range of 26%27%. ATBS, the company's key highmargin product, delivered strong growth during the quarter, driven by rising demand in the O&G sector, where it is used as a tertiary oil recovery agent. The antioxidants segment, which generated ~Rs2.2bn revenue in FY25, is expected to see robust growth ahead, supported by annual contracts the company plans to secure with domestic customers. New products like MEHQ and Guaiacol are...

Vinati Organics is expanding its ATBS capacity to 60,000 MT by Q1FY26, driven by strong demand and a favorable outlook for the US oil & gas sector.

Volume growth seen; healthy growth to continue

Vinati Organics (VO)’s 3QFY25 revenue came in a tad above our estimate at INR5.2b. Gross margin expanded 180bp YoY to 49%, while EBITDAM was up 180bp YoY at 27.4%. EBITDA increased 24% YoY to INR1.4b and PAT grew 24% to INR956m (our est. INR1b).

Vinati Organics (VO) has strengthened its operations through backward integration, which is expected to expand its margins.

Q1 PAT of Rs. 86 crore, which is an 18% decline q-o-q, fell 22% short of our estimate due to weaker-than-expected revenue and higher raw material costs.

Vinati Organics (VO)’s 1QFY25 revenue came in below our estimate at INR5.2b. Gross margin declined 270bp YoY to 44.9%, while EBITDAM was up 100bp YoY at 23.8%.

Sequential recovery in Q4; a healthy growth to sustain

Vinati Organics (VO)’s revenue came above our estimate due to a robust
recovery in volumes across products in 4QFY24. However, gross margin
contracted 310bp YoY to 46.6%, while EBITDAM was down 110bp YoY to 27.3%.
EBITDA rose 2% YoY to INR1.5b, while PAT was flat at INR1b (our est. INR630m).

Weak performance owing to subdued demand for ATBS