Vinati Organics, a company that specialises in speciality chemicals and is based in Maharashtra, had a tough third quarter this year (Q3FY24). Its earnings before interest, taxes, depreciation, and amortisation (EBITDA) declined by 22%, and its profit after tax (PAT) decreased by 28%.
In an interview with CNBC-TV18, Vinati Saraf Mutreja, MD of Vinati Organics said the next financial year will be better with recovery in the existing products and some of the new products coming on stream. He expects revenue growth of 15-20% in FY25.
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The company's revenue decreased from ₹516 crore in Q3FY23 to ₹448 crore in Q3FY24. Additionally, its EBITDA declined from ₹148 crore to ₹115 crore. Consequently, the operating profit margin decreased from 28.6% to 25.6%, and the profit after tax decreased from ₹107 crore to ₹77 crore.
Discussing the strategies known as "Europe-plus-one" and "China-plus-one" in the chemical industry, Saraf mentioned that India is well-positioned to fulfil the demand. She highlighted various government incentives, such as production-linked incentive (PLI) schemes, attracting interest from multinational companies (MNCs) and those based in Europe and the USA. These companies are now looking at India as an alternative supplier, making the "China-plus-one" strategy a lasting trend. Indian companies stand to benefit from this shift in the coming years.
Many countries relied heavily on China for various products, but during the COVID pandemic, when China shut down, the limitations of this dependency became clear. This realisation prompted the adoption of the "China-plus-one" strategy, emphasising the importance of diversifying the supply chain.
Over the past year, the Vinati stock has declined by more than 8%. The company's market capitalisation is currently at ₹17,497.62 crore.
For the entire interview, watch the accompanying video
(Edited by : Shweta Mungre)
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