Target: ₹2,593
CMP: ₹2,241.85
Vinati Organic’s (VO) FY22 Annual Report highlights its long-term relationships with its clients and its focus on R&D expertise, which has helped amplify value for all its stakeholders, despite industry cycles and macro headwinds.
The management is confident that a niche product portfolio, expansion in its existing capacities, and foray into new products will enable it to keep the revenue momentum strong (that it generated in FY22 after a muted FY21), although macro challenges still remain.
The demand outlook for the ATBS segment remains positive going forward after a temporary blip in FY22. Veeral Organics Pvt. (a wholly-owned subsidiary of VO) is set to commence production of MEHQ, Guaiacol, and Iso Amylene in 1HFY24, which should drive the next level of growth in VO.
Veeral Additives will commence production of AOs from Butyl Phenol, thus resulting in forward integration. Post amalgamation, VO will become the largest and only doubly integrated manufacturer of AOs in India. The latter is right now imported into the country, with the domestic market seeing huge demand for PP, LLDPE, etc., which is expected to grow at 8 per cent YoY.