Vinati Organics (VO IN) – Q3FY26 Result Update – Lower input costs fuel margin expansion – Downgrade to ‘Accumulate’
Published on 02 Feb 2026
VO reported revenue of Rs5.3bn in Q3FY26, growing by modest 1.7% YoY, while declining 3.5% QoQ. EBITDA margin expanded by 220bps YoY, driven by a decline in raw material costs. The management expects sustainable margins to remain in the range of 26%–28%. ATBS, the company’s flagship high-margin product, accounted for 36% of total revenue during the quarter. New ATBS capacity of ~10,000mtpa was commercialized in Q3 and is expected to be ramped up gradually over the next 2 years. Phase II of the capacity expansion is scheduled for commissioning in Q1FY27. The antioxidants segment contributed 14% to the overall revenue mix and has a peak revenue potential of Rs7bn. Revenue contribution from new products such as MEHQ and guaiacol, currently in the customer approval phase, is expected to commence from FY27, with a gradual ramp-up thereafter. Additionally, plants for upcoming products such as 4MAP, TAA and PTAP are expected to be operationalized in Q4FY26, providing further medium-term growth visibility. The stock is currently trading at 31x FY28E EPS. We value the company at 38x Dec’27E EPS and downgrade the stock to ‘Accumulate’ rating due to earning downgrade, with a revised TP of Rs1,671.
