Vinati Organics Initiating Research Reports By Nirmal Bang, Philip Capital & Karvy

Vinati Organics is a global leader of 2‐acrylamido 2‐methylpropanesulfonic acid (ATBS, 46% of total sales) in the world with a capacity of 26,000TPA and ~45% market share. Global scale and backward integration in ATBS (it is the only integrated player in the world) has earned it cost/price leadership. Price leadership is evident – despite being a crude derivative, VO’s ATBS prices remained stable over the 70% correction in crude prices in the last two years. VO’s cost/price leadership puts up an entry barrier for others. It reported sales/volumes CAGR of 28%/23% in ATBS over FY10‐15 and we estimate 15% sales CAGR over FY16‐18 to Rs 3.35bn, led by steady progress in construction chemicals, paints, and water‐treatment chemicals.

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Vinati Organics-Initiation Coverage-12 April 2016