CARE upgrades Vinati Organics' long-term rating; shares ends flat

Vinati Organics share price NSE: The stock of Vinati Organics—a manufacturer of specialty chemical and organic intermediaries—settled at Rs 1.55 or 0.08 per cent lower at Rs 1,827.8 apiece on NSE, continuing a downward trend over the sixth session.  During market hours on Tuesday, ratings agency CARE Ratings upgraded its long-term ratings on certain bank facilities of the specialty chemicals maker. 

Here's how the counter moved on Wednesday: 

Source: NSE

Here are the details of the rating action by CARE:

The agency upgraded its fund-based long-term cash credit rating from ‘CARE AA’ with a ‘positive’ outlook to ‘CARE AA+’ with a ‘stable’ outlook. CARE reaffirmed its non-fund based rating at ‘CARE A1+’, Vinati Organics said. According to CARE Ratings, the competitive advantage of Vinati Organics in both product segments is expected to sustain in the medium term.

"The ratings also factor in the improvement in sales reported by VOL in FY23 primarily driven by a 68 per cent increase in IBB volumes and a 21% rise in Butyl Phenol (BP) volumes, supported by higher pricing and robust ATBS demand in H2 FY23, particularly from multinational customers who built up inventory," CARE Ratings said in its report, dated October 9. Analysts at CARE pointed out that the ratings continue to derive strength from the long-track record and experience of the promoters in the specialty organic chemical industry.

“VOL continues to benefit from long-term relationships with established and reputed clientele across various geographies. The backward integrated manufacturing process with zero discharge along with VOL’s cost-efficient operations acts as an entry barrier for new entrants,” they wrote.

Vinati Organics shares: Past performance

Vinati Organics' stock has declined nearly eight per cent so far this year, in stark contrast to a rise of nearly nine per cent in the headline Nifty 50 index.

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