Please refer to important disclosures at the end of this report
1
Vinati Organics Limited (VOL) is a specialty chemical company, focusing on
manufacturing specialty chemicals and organic intermediaries. VOL is a global
leader in manufacturing value added products catering to industrial and
consumer companies. VOL management expects to commence its new plant fo
r
producing para Tertiary Butyl Toluene (PTBT) and para Tertiary Butyl Benzoic Acid
(PTBBA) soon. VOL has recently announced its plans of fresh investments into
new projects to manufacture Para Amino Phenol (PAP) at Mahad and Butyl
Phenols at Lote. The combined capex of the project is over `700cr. and both the
projects are in the advanced stage of environmental clearance. VOL maintain its
guidance of 15% volume growth in FY17 with strong margins beyond 30%.
Further, with launch of three new products PTBT, PTBBA and Tertiary Butyl (TB)
Amine, revenue growth is expected to pick-up in coming quarters. Going ahead
with new products and positive outlook the company is expected to post health
y
EPS growth and strong return ratios.
W
hile PAP is a larger project with required
capex of ~`550cr. and would take time to execute the project. The company has
reduced debt and is virtually debt free company. VOL has reported an increase
in cash flow from operations from `91cr in FY13 to `168cr in FY16. Thus, with
healthy cash flow VOL is able to manage the on-going capex and launch of ne
w
products, also at the same time reducing its debt, which makes the company’s
balance sheet and liquidity position strong. The company has good consistent
profit growth of 20.40% over 5 years and has a healthy return on equity (ROE) o
f
29.26% for the last 3 years. Hence Buy.
BUY
CMP `722
Stock Info
Sector
Beta
Bloomberg Code
Shareholding Pattern (%)
Promoters 74.0
MF / Banks / Indian Fls 6.8
FII / NRIs / OCBs 1.7
Indian Public / Others 17.5
Abs. (%) 3m 1yr 3yr
Sensex 8.2 17.6 32.0
Vinati Organics 20.1 77.0 178.8
0.7
Reuters Code VNTI.BO
VO@IN
2
BSE Sensex 28,946
Nifty 8,935
Face Value (
`
)
Specialty Chemicals
Market Cap (
`
cr) 3,724
52 Week High / Low 800/363
Avg. Daily Volume 7,123
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
V
inati Organics
Others | Specialty Chemicals
March 14, 2017
Vinati Organics | Specialty Chemicals
March 14, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
DISCLAIMER
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited,
Bombay Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL
and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private Limited is a
registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing
/dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed public
offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
the merits and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Pvt. Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
Disclosure of Interest Statement Vinati Organics
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
(
< -15
)