Reduced Cost enhances Vinati Organic’s net profits

A speciality chemicals company, Vinati organics has beaten the street forecasts, wherein it was expected to post muted results in Q4. However, the company has failed to give positive growth in terms of its year ended March 2016 revenues. Ultimately company has reduced its direct costs to increase net profits.

The quarter on quarter results show that company’s revenues have increased by 8.7 per cent to Rs 149.13 crore as against Rs 137.22 crore in the last quarter.  EBITDA has come in flat at Rs 50.73 crore as against Rs 50.51 crore in the last quarter. Net Profits have risen by 30.2 per cent to Rs 39.28 crore after company reduced its tax expenditure by more than 50 per cent.

Year on Year revenues have dropped by 14.2 per cent from Rs 173.82 crore. However, net profits have risen by 21.1 per cent from Rs 32.43 crore in the same quarter of last year.

On a yearly basis company’s revenues have dropped 23.8 per cent to Rs 578.21 crore from Rs 758.97 crore for year ended March 2015. However, EBITDA has posted a growth of 7.8 per cent to Rs 206.78 crore after company reduced its raw material costs by 35 per cent. Net profit stands at Rs 131.57 crore as against Rs 115.79 crore, i.e. an increase of 13.6 per cent.

Vinati Organics manufactures specialty organic intermediaries and monomers. Company’s USP includes manufacturing of speciality organic intermediates and monomers, including IBB (Isobutyl Benzene); and ATBS (Acrylamido tertiary-butyl sulfonic acid). Its Mahad-Raigad plant is the biggest IBB manufacturing facility in the world.

The stock has posted its results on Saturday, May 14. The stock is currently trading lower by 2.3 per cent at Rs 464.90.