Vinati Organics Share Price Rises As HDFC Securities Upgrades The Stock, Raises Target; Should You Buy?

Vinati Organics share price gained nearly 1% on Wednesday, June 18, after brokerage firm HDFC Securities turned bullish on the stock, expecting an upside potential of 20%. Vinati Organics shares opened higher at Rs 1,913 today and touched an intraday high of Rs 1,937.05 on the BSE. The specialty chemicals stock ended up 0.61% at Rs 1,921.60 apiece on the BSE on June 18.

HDFC Securities has upgraded its rating on Vinati Organics to "Buy" from "Reduce", and also raised the target price to Rs 2,308 from Rs 1,576 earlier. Vinati Organics share price is currently trading at a 1-year forward PE of 32.7x, which is below 1-standard deviation for the period between FY19-25E.

The brokerage firm highlighted that Vinati Organics looks to capitalise projects worth Rs 800 crore over the next one year. The specialty chemicals maker is expanding its ATBS (Acrylamide Tertiary-Butyl Sulfonic Acid) capacity by a whopping 50% to 60 kilo tonnes per annum (KTPA), investing around Rs 300 crore in the process.

With a 60-65% market share in ATBS globally, it is the largest exporter to the US and European markets. Robust demand for ATBS and its derivates by diverse end-users in developed markets will fill the capacity, according to HDFC Securities.

New Projects from Subsidiary Veeral Organics:

Vinati Organics' subsidiary, Veeral Organics Pvt Ltd (VOPL), is set to launch new products by commissioning Rs 500 crore worth of projects in the second quarter of FY26. Rising demand for antioxidants is expected to push the plant's utilisation rate from below 50% to 90% by FY27.

The company also plans to expand further in antioxidants and butyl phenols, which will support growth from FY26 to FY28. VOPL is using advanced vapour phase technology to manufacture MEHQ and other value-added products.

These additions will increase the share of high-margin products in the company's portfolio to 41% by FY28, up from 30-35% in FY25. This is expected to boost EBITDA margins and return on equity, HDFC Securities said.

Revenue, Margin Expansion in Sight:

HDFC Securities expects the company's revenue to increase by 19% to Rs 2,675 crore in FY26, and by 24% to Rs 3,317 crore in FY27 due to capacity expansion as well as increase in the utilisation of ATBS and ramping up antioxidants business owing to volume growth in end industries.

"Additionally, the ramp-up of new molecules will also drive revenue. The contribution of high-margin molecules (ATBS+MEHQ) will jump up from ~30-35% in FY25 to 40% in FY28. We expect EBITDA margin to increase by 538 bps from 25.8% in FY25 to 31.2% in FY28, owing to increased contribution of high-margin molecules," HDFC Securities said.

The brokerage firm also expects RoE to improve by 446 bps from 15.4% to 19.9% in FY28, driven by improved margins and asset turnover. Vinati Organics is estimated to generate a Free Cash Flow (FCF) of Rs 1,440 crore spread over FY25-28.

Vinati Organics Q4 Results 2025:

Vinati Organics reported a net profit of Rs 123 crore for the quarter ended March 2025, registering a growth of 18.3% from Rs 104 crore in the year-ago period.

The company's revenue from operations in Q4FY25 increased 17.8% to Rs 648.5 crore from Rs 550.3 crore, year-on-year (YoY).

At the operational level, earnings before interest, taxes, depreciation and amortisation (EBITDA) in teh March quarter grew 20.5% YoY to Rs 181 crore, while EBITDA margin improved to 27.79%.

Vinati Organics also recommended a final dividend of Rs 7.50 per equity share (750%) for the financial year ended March 31, 2025.

Vinati Organics Share Price Performance:

Vinati Organics' share price has gained 8% over the past one month and 23% in the last three months. On a year-to-date (YTD) basis, the stock is up 6%, while it has delivered a 9% return over the past six months. Over the last one year, Vinati Organics share price has remained largely flat, but has generated a strong return of 94% over a five-year period.

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