Motilal Oswal Places Buy On This Midcap Chemicals Stock, Likely To Give 26% Return

Valuation and view

Accoridng to Motilal Oswal, Veeral Organics Pvt. Ltd. (wholly owned subsidiary of Vinati Organics) is set to commence production of MEHQ, Guaiacol, and Iso Amylene by end-FY24, which should propel VO into the next leg of its growth story. Veeral Additives has commenced the commercial supply of AOs and should contribute to revenues from 1QFY24. The management expects to complete the amalgamation by Jun'23. Post the amalgamation, VO would become the largest and the only doubly integrated manufacturer of AOs in India.

"The stock is trading at 28x FY25E EPS and 21x FY25E EV/EBITDA, with return ratios of 20-23%. It had a fixed asset turnover of 2.4x as of FY23. We value the company at 35x FY25E EPS to arrive at our TP of INR2,245. We reiterate our BUY rating on the stock," the brokerage has said.

Stock Outlook

On Wednesday, the shares of Vinati Organics closed at Rs. 1,787.75 apiece, down 0.31% compared to its previous close. Its 52 week high is Rs. 2,377 apiece and the 52-week low is Rs. 1,692.55 apiece, respectively.

The stock has fallen 8.85% in 1 week, and 9.95% in 1 month, respectively. It has fallen 12.36% in 1 year. In the past 3 years, it has given 85.8% positive return, while in 5 years, it has 250.23% strong return.

Disclaimer - The stock has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.