Vinati organics is an Indian-based company founded in 1989 and is headquartered in Mumbai. Vinati organics is primarily engaged in producing different types of chemicals. It produces organic intermediaries and monomers.
Some of its products are
Butyl Benzene, normal butyl benzene, secondary butyl benzene, tertiary amyl benzene, and 3 phenyl pentane.
Currently, it has a market capitalization of 18,000 crores
Plus
Vinati organics has 3 decades of experience in producing different types of chemicals.
Vinati organics is the world’s largest producer of IBB and ATBS chemicals.
No 1 manufacturer in producing ATBS with 60% market share. The patent is going to expire in march 2022.
Over 35 countries are represented worldwide by the company.
Do not heavily reliant on China for imports
Downsides
Heavily dependent on some products
High competition
Vinati Organics Revenue and profit
| Table | 2019 | 2020 | 2021 | 2022 |
| Revenue | 1,128 | 1,029 | 954 | 1,616 |
| Net Profit | 282 | 334 | 269 | 347 |
The first parameter we are considering is sales growth.
In 2019 the company posted revenue of 1,128 cores with a net profit of 334 crores. Surprisingly in 2022, the company posted 1,616 crores in sales with a CAGR of 13% growth. The 5-year CAGR stood at 20% and 10 years at 14%. Generally, in chemical sector companies, the profit margin will be very lower. But Vinati organics has had an average profit margin of 35.5% for the last four years. Generally, producing specialized chemical products is a very complicated and it is a time-consuming process.
Vinati Organics ROE and ROCE
ROE defines as Return on Equity and ROCE defines as Return on capital employed. It is used to measure a company’s ability to make money for the capital employed in return for equity. Analyzing the 10-year ROE, Vinati Organics has had a whopping 24%.
The ROCe for the company stood at 32% which is really commendable when we compare it to the industry leader Pidilite Inds which is at 32%.
Vinati organics SWOT analysis
Strengths
Strong market proposition
With its patented products, Vinati organics has a strong market position. It is the leading producer of IBB and ATBS chemicals.
Diversified product portfolio
Vinati organics has wide-ranging products catering to different sectors. It produces products for pharmaceuticals, agrochemicals, and personal care.
Efficient workforce
Vinato Organics has well-organized skilled employees.
Weaknesses
High dependence
The company has a high dependence on a few customers for selling its products.
Raw material prices
The company uses different types of chemical products to make its final product. The chemicals used in manufacturing are highly reactive to prices. This in turn will affect the company when there are uncertainties happens.
Opportunities
High demand for chemicals
There has been a huge demand for pharmaceuticals, especially during the period of Covid and after. There are ample opportunities for Vinati organics to grab the market.
Research and development
With its research and development, Vinati organics can become a monopoly company.
Threats
High completion.
As the demand is rising, new companies are emerging every year which is denting the old legacy companies in their sales.
Economic slowdown
Due to recession fears and high inflation, the cost of goods is rising.
Sector growth
The chemical industry in India is growing rapidly every year. The current market is worth approximately $178 billion. And it is projected to reach $300 by 2025. Vinati organics has a better product line with numerous products in its segment.
Growth
Revenue streams
Future analysis
