Neutral Vinati Organics Ltd., target Rs 595.0 : Motilal Oswal Securities

Motilal Oswal Securities has Neutral call on Vinati Organics Ltd. with a target price of Rs 595.0. The current market price of Vinati Organics Ltd. is 535.5. Time period given by analyst is year, when Vinati Organics Ltd. price can reach defined target. VOL remains a high quality chemical play based on (1) New product launches, (2) Traction in ATBS demand, (3) High pricing power, given VOL's niche position and product selection, and (4) Strong margins coupled with a net debt-free balance sheet. We expect the company to grow its profits at 24% CAGR over FY16-18E. Vinati Organics with its superior return ratios is available at 17.9x FY18E EPS. We maintain our target price of Rs 595 (20x FY18E EPS) providing for an upside of ~12%.