Accumulate Vinati Organics; target of Rs 1880: Deven Choksey

Deven Choksey's research report on Vinati Organics

Q1FY26 Revenue grew marginally by 3.3% YoY (-16.4% QoQ) to INR 5,420 Mn., stood below our estimates by 4.6%. Gross profit grew by heathy rate of 20.4% YoY (- 7.7% QoQ) to INR 2837 Mn., resulting in improvement of gross margin by 744bps YoY (+496bps QoQ) to 52.3%. EBITDA grew at a robust pace of 28.1% YoY (-11.5% QoQ) to INR 1,597 Mn., stood above our estimates by 6.7%, driven by significant improvement in gross margins. While management has guided EBITDA margins to remain in the range of 26.0 to 27.0%, margins for Q1FY26 came in significantly higher at 29.5% (+571bps YoY / +164bps QoQ). Net profit stood at INR 1,042 Mn, up 23.8% YoY (-15.3% QoQ), above our estimates by 4.8%, driven by improved operational performance.

Outlook

We have rolled forward our valuation basis to Jun’27 estimates. We value Vinati Organics at 34.0x Jun’27 EPS, implying a target price of INR 1,880. We reiterate our “ACCUMULATE” rating on the stock.

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Vinati Organics - 25082025 - deven