Markets

Broker's call: Vinati Organics (Buy)

| Updated on September 27, 2019 Published on September 28, 2019

AnandRathi

Vinati Organics (Buy)

CMP: 2,234

Target: ₹2,810

Vinati Organics Ltd (VOL) is engaged in manufacturing of basic organic chemicals, specialty chemicals and niche specialty chemicals used in a wide range of industries including oil field, water treatment, pharmaceutical, mining and paints. Headquartered in Mumbai, the company operates through its two manufacturing facilities located at Mahad and Lote Parashuram, Maharashtra, with an integrated B2B business model. Currently, the company is the world’s largest manufacturer of its two key products Isobutyl Benzene (IBB) and 2-Acrylamido 2 Methylpropane Sulfonic Acid (ATBS) with a market share of 65 per cent.

Several factors including applications of specialty chemicals in several industries, increasing exports and tightening environmental norms in developed markets and China should continue to support growth prospects of India’s specialty chemicals sector.

We remain optimistic owing to VOL’s global market leadership in its key products — ATBS and IBB, proven profitability track record and strengthened client relationship. Further, the company remains well positioned for growth as it is focused on bolstering production capacity for ATBS (from existing 26,000 TPA to 4,00,00 TPA) and introducing four different types of butylphenol .

Published on September 28, 2019
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