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Buy Vinati Organics; target of Rs 1700: HDFC Securities

1 November, 2018 11:19 AM
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Buy Vinati Organics; target of Rs 1700: HDFC Securities

HDFC Securities is bullish on Vinati Organics has recommended buy rating on the stock with a target price of Rs 1700 in its research report dated October 29, 2018.

Vinati Organics (VO) reported a strong set of numbers with Sales/EBITDA/PAT coming in at Rs 2.53bn/Rs 9.5bn/Rs 650mn growing at 57.3/107.3/123.1% respectively. VO reported the highest ever quarterly EBITDA margin of 37.7% (expansion of 9.0 percentage points YoY). Vinati Organics has been commanding a premium in valuations due to an impeccable product selection history, best in class return ratios (ROE/RoIC for FY19 expected at 28.0/25.6%) and a strong technocrat promoter backing.

We are valuing Vinati Organics 25xSept’20 EPS with a revised target price of Rs 1,700. We upgrade our rating to Buy.

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