Vinati Organics Gets 'Buy' Upgrade From PL Capital Post Q1 Result Citing Margin Resilience, Capacity Expansion

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PL Capital Report

Due to the recent correction in stock performance along with strong visibility from ATBS, new product ramp-up, and capacity expansion, we upgraded Vinati Organics Ltd. to ‘Buy’ with a target price of Rs 2,091, valuing the stock at 40x FY27 EPS.

The company reported revenue of Rs 5.4 billion in Q1 FY26, reflecting a modest 3.3% YoY increase but a sharp 16% sequential decline. Management has guided for ~15% revenue growth in FY26, led by an expected 20% increase in volumes, with Ebitda margins projected at ~27%.

ATBS, the company’s flagship high-margin product, continued to deliver robust growth and remains oversold, likely to be supported by rising demand from the oil & gas sector where it is used as a tertiary oil recovery agent.

Phase I of the ATBS capacity expansion has been completed, while Phase II is scheduled to come online in April’26. In the Antioxidants (AOs) segment, demand remains healthy though pricing pressure persists due to competition from China and Singapore.

New products such as MEHQ and Guaiacol did not contribute meaningfully in Q1, but are expected to ramp up in FY26, with a combined peak revenue potential of ~Rs 4 billion. Additionally, upcoming product launches including anisole, 4MAP, TAA, and PTAP, expected in Q2 FY26 and Q3 FY26 are likely to strengthen the growth trajectory.

We upgraded the stock to ‘Buy’. The stock is currently trading at 32x FY27 EPS.

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