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  • 07 Nov 2022
  • ICICIdirect Research

VINATI ORGANICS REPORTED Q2FY23 HIGHER THAN EXPECTED ENERGY COST AND OTHER EXPENSES

VINATIORGA - 1858 Change: -7.75 (-0.42 %)

News:

 Vinati Organics reported top-line growth of 51.4% YoY to Rs 566.3 crores against our expectations of Rs 520 crore. RMAT cost increased by 59% YoY to Rs 311.3 crores, largely driven by rise in input cost and delay in passing on entire inflation

·       Gross margins declined by 253 bps YoY while sequentially it remained flattish. EBITDA for the quarter declined by 78 bps to 26.2%. Absolute EBITDA came at Rs 148.5 crores against our estimates of Rs 142.4 crores. Other Expenses and Power & fuel increases by 50% YoY and 82% YoY respectively

·        The bottomline growth was aided by 43% YoY to Rs 116 crores against our estimates of Rs 107.9 crores. Tax expenses increased to 25% vs 21% in Q2FY22

View:

 Demand for high grade ATBS has been increased in Q2FY23 and ATBS accounts for 50% of revenue, thus this impacted positively on revenue front. Vinati will have backward integration for MEHQ and Guaiacol we expect it to produce meaningful market share in the long run. Since ATBS has been witnessing strong growth along with decent performance from butyl phenols, one can expect this trend should continue from both of these segments in coming year. 

Impact:

Positive