Vinati Organics Sees 20-25% Growth In Next Three Fiscals

Vinati Organics Ltd., a maker of specialty chemicals and organics, expects revenue and operating profit growth of 20-25% over the next three fiscals, despite volatility in the end-user industry.

The company’s largest segment -- ATBS chemical, which is used in oil drilling -- is witnessing strong demand, Vinati Saraf, managing director and chief executive officer at Vinati Organics, told BQ Prime’s Niraj Shah in an interview.

In a regulatory filing, the company announced it will expand its capacity for ATBS by 50%, taking it from 40,000 metric tonnes to 60,000 metric tonnes. The capacity expansion will cost Rs 300 crore, which will be funded by internal accruals. The project is expected to get commissioned by December 2023.

The company will also increase utilisation of expanded capacities in FY25, Saraf said.

According to Saraf, Vinati Organics is facing supply chain issues due to China’s strict Covid-19 lockdowns, which has resulted in a lengthened delivery cycle from 6-8 weeks to 10-12 weeks.

The company will not raise product prices unless there’s a hike in the prices of raw materials, Saraf said. “We have long-term contracts with most of our customers [and] it's a formula-based pricing mechanism. So only when the raw material price fluctuates does our end product price fluctuate. We maintain our margin in dollars per kg.”

Watch the full interview here: