Vinati Organics Ltd., incorporated in 1989, is a mid-cap company (with a market capitalization of Rs 19,152.41 crore) operating in the chemicals business.
For the quarter ended 03/31-2021, the company reported stand-alone total income of Rs 286.34 crore, up 23.02% from last quarter total income of Rs 232.76 crore and up by 9.47% over the total income for the same quarter of last year of Rs 261.56 crore. The company reported net profit after tax of Rs 70.86 Crore in the last quarter.
Justification of the investment
The stock is trading at 36x FY23E EPS of INR50.5 and 26x FY23E EV / EBITDA, with attractive yield ratios of around 25% (+ 600bps v / s FY21). It has a capital turnover rate of 1.3x, which is expected to double over the next three years. The brokerage expects a 33% CAGR in FY 21-24E and values ââthe company at 43x EPS for FY 23E to arrive at a TP of INR 2,170.
Promoter / FII Holdings
Promoters held 74.1% of the company’s capital as of March 31, 2021, while FIIs held 3.5%, DII 7.3% and the public and others 15.2%.
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