Stock Of The Day: Vinati Organics To End Three-Year Muted Move With 50% Rally

Shares of Vinati Organics Ltd. are poised for a 49% rally, as per Motilal Oswal Financial Services Ltd.— after a range-bound trade since 2021. The target of Rs 2,600 per share set by the brokerage will take the share to a new life high.

The long-term trend gauge of the 200-day moving average at the Rs 1,890 mark will be the key barrier to the stock reaching Motilal Oswal's target. However, the counter is also trading above the 14-day simple moving average and the 21-day exponential moving average.

The shares fell as much as 11.75% in 2025. However, saw a momentum change in the short term from Jan. 29. The stock has fallen 1.66% in the last 12 months.

The stock currently tests the resistance level of Rs 1,765. A close above could send the stock near the 200-DMA mark. On the downside, the stock sees support at Rs 1,650 level.

Vinati Organics shares rose as much as 1.72% on Tuesday, while the benchmark Nifty 50 advanced 0.95%. The relative strength index was at 61.

Ten of the 15 analysts tracking the company have a 'buy' rating, one suggests a 'hold', and four have a 'sell', according to Bloomberg data. The average of the 12-month analysts' price target implies a potential upside of 18%.

Vinati Organics' long-term growth outlook is healthy, according to Motilal Oswal. The brokerage maintained its 'buy' rating with a target price of Rs 2,600 per share.  

The company has three-kilo tonnes per annum capacity (combined) for MEHQ and Guaiacol, five-kilo tonnes per annum for Anisole, 30-kilo tonnes per annum for Amylene, and one-kilo tonnes per annum for four MAP. "These products will be the key growth drivers," the brokerage said.

The management has guided for a revenue CAGR of approximately 20% in the next three years, driven by new, as well as existing products (at existing prices based on volume), the brokerage said. "We expect a CAGR of 19%/23%/25% in revenue/Ebitda/profit during fiscal 2024-27."

Our long-term view remains positive for the segment, although there is a threat of Chinese supplies, Motilal Oswal pointed out.