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Buy Vinati Organics; target of Rs 2740: Motilal Oswal

Motilal Oswal is bullish on Vinati Organics recommended buy rating on the stock with a target price of Rs 2740 in its research report dated January 19, 2023.

January 21, 2023 / 03:56 PM IST
 
 
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Motilal Oswal's research report on Vinati Organics

Oil drilling activities remain vigorous globally as the countries move away from their dependence on Russian oil and gas. Average global rig counts have risen 10% since the Russia-Ukraine conflict started in Mar’22. In line with the above, Vinati Organics (VO)’s management outlook for ATBS remains robust and it has announced a 50% capacity expansion to 60ktpa (from 40ktpa), which is likely to come online in 2HFY24. ATBS primarily caters to the oil and gas industry. Exports form a major part of VO’s overall revenue and according to our database, volumes remain steady YoY. Implied blended realizations in USD/kg have also been firm and move in line with the Brent prices over a longer period of time, according to our research.

Outlook

We expect RoE to improve to 26% for FY24 from 21% in FY22. The stock is trading at 32x FY24E EPS and 25x FY24E EV/EBITDA. We reiterate BUY on the stock, and value it at 35x Dec’24 EPS to arrive at our TP of INR2,740.

For all recommendations report, click here

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Vinati Organics - 20 -01-2023 - moti

Broker Research
first published: Jan 21, 2023 03:56 pm

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