The company also forecasts an improvement in its return on capital employed (ROCE) as the recently commissioned capacities grow over the next two to three years.
In the April-June 2026 quarter, the company reported a 28% rise in revenue, with earnings before interest, taxes, depreciation, and amortization (EBITDA) increasing by 7% and net profit up by 4.5%. These results were impacted by higher raw material costs and currency fluctuations affecting margins.
Mutreja noted that the revenue growth for the quarter stemmed from several factors, including the depreciation of the rupee, which bolstered exports that comprise 55% of total revenue, along with price increases and greater volumes in antioxidants and other new product lines.
She explained that a sharp rise in raw material prices following the West Asia conflict limited the company’s capability to enhance margins despite increased sales. “The EBITDA margin did not grow as much because a large part was just due to rupee depreciation coupled with rising raw material costs,” she stated.
Despite these challenges, the company upheld its profitability projections. “I believe we should be able to maintain… around a 26% EBITDA margin,” Mutreja mentioned, adding that this outlook reflects contributions from the entire product portfolio, including 2-acrylamido-2-methylpropanesulfonic acid (ATBS), antioxidants, butyl phenols, IBB, and other derivatives.
Vinati Organics, with a market capitalization of ₹13,461.50 crore, has witnessed its shares decline by more than 29% in the past year.
Vinati Organics anticipates that the second half of 2026-27 will outperform the first half due to increased demand for ATBS, contributions from Viral Organics, and new product launches supporting revenue growth. The specialty chemicals manufacturer is on target to maintain its EBITDA margin guidance of 26-27%.
Vinati Organics has boosted its ATBS capacity from 30,000 tonnes to 50,000 tonnes and expects a demand recovery to commence in October. Concurrently, the Veeral Organics facility is undergoing re-engineering, expected to finish by December, with revenue contributions starting in January. Mutreja stated that the Veeral Organics business could generate about ₹500 crore annually at 70-80% capacity utilization. For 2027-28 (FY28), she predicts approximately ₹150 crore in revenue from this segment.
Addressing concerns regarding anisole, a crucial raw material for new products, she noted that the company would continue to adopt a flexible sourcing strategy. If importing anisole proves to be more cost-effective than internal production, the company will opt for imports. She emphasized that this decision would not significantly affect revenue or EBITDA growth.
Mutreja shared that Vinati Organics currently achieves a ROCE of 15-16%, which could rise to around 20% over the next two to three years as the utilization of existing capacities improves. The company is also investing in downstream products, including butyl phenols, monomethyl ether of hydroquinone (MEHQ), 4-methoxy acetophenone, isoamylene-based derivatives, and additional antioxidant products.
She added that the antioxidants business has experienced favorable market conditions over the past three months, with improving realizations, and anticipates that the additives sector will deliver a 15-20% ROCE as utilization increases.
For the full interview, watch the accompanying video
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