Recommendations from Chemicals and Trading Sectors

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations


VINATI ORGANICS LTD

CMP - ₹ 2,100.45
BSE CODE 524200
Volume 3,656
Face Value ₹ 1
Target ₹ 2,210 - ₹ 2300
Stoploss ₹ 1,990 (CLS)

Vinati Organics Limited is a global leader in the manufacturing of IBB (isobutyl benzene) and ATBS (acrylamide tertiary butyl sulfonic acid). Since its inception in 1989, the company has been a manufacturer of specialty chemical and organic intermediaries with a sustained market presence spanning over 35 countries in the world. It has evolved from being a single product manufacturer to an integrat- ed business, offering a wide range of products to some of the largest industrial and chemical companies across the US, Europe and Asia. Focusing on the quarterly performance of the company, it recorded net sales of ₹ 368.95 crore in Q3FY22, a 65.1 per cent jump from ₹ 223.47 crore in Q3FY21. Operating profit in Q3FY22 stood at ₹ 107.37 crore as compared to ₹ 81.38 crore in Q3FY21, a rise of 31.93 per cent. The net profit witnessed an increase of 29.75 per cent in Q3FY22 to ₹ 83.22 crore as compared to ₹ 64.14 crore in Q3FY21. The company has posted a phenomenal performance this year and its long-term outlook has signifi-cantly improved on account of capacity expansion and new product launches supported by a strong balance-sheet and healthy ROE and ROCE numbers. Hence, we recommend BUY. 

MMTC LTD.

CMP - ₹ 52.85
BSE CODE 513377
Volume 17,21,051
Face Value ₹ 1
Target ₹ 59-62
Stoploss ₹ 49.50 (CLS)

MMTC Limited is a Mini Ratna Category I central public sector undertaking (CPSE), incorpo- rated in 1963. It is one of the largest international trading companies in India and is the first CPSE to be accorded the status of ‘Five Star Export House’ by the government for its long-standing contribu- tion to exports. MMTC continues to be a leader in mineral exports for over five decades now. Its net sales for Q3FY22 stood at ₹ 4,903.74 crore as opposed to ₹ 2,404.51 crore in Q3FY21, a phenomenal increase of 103.94 per cent. The operating loss fell to ₹ 23.02 crore in Q3FY22 as compared to the operating loss of ₹ 16.71 crore in Q3FY21. The net loss reported by the company in Q3FY22 was ₹ 95.23 crore as against the net loss of ₹ 92.63 crore reported in Q3FY21. The company has reduced its debt signifi- cantly and is expected to give a good quarter as the commodity prices are increasing. Hence, we recommend BUY.

(Closing price as of Apr 19, 2022)