Financial Performance:

For the quarter ended March 2010, Vinati Organics reported 4% dip in Net Profit at Rs 11.63 crore despite 34% rise in the Net sales to Rs 63.47 crore. OPM slipped by 420 bps to 24% restricting Operating Profit up by 14% to Rs 15.26 crore. Finally dip in the forex gain by 73% to Rs 0.74 crore has pulled profits down.

• For the year ended March 2010, Vinati Organics has reported robust growth of 59% in the Net Profit at Rs 40.05 crore over 21% raise in the Net Income from Operations at Rs 237.43 crore. Operating margins were up by 450 bps to 24.1% and pushed Operating Profit up by 49% to Rs 57.31 crore.
• Revenue from exports contributes nearly 80% of the total revenues of the company. USA and Europe constitute 30% each of the total 80% of exports, while the remaining 20% constitutes share of South East Asia.
• The production volumes of IBB and ATBS during the quarter were 3000 MT and 2000 MT respectively. On the other hand revenues from the IBB and ATBS were to the tune of Rs 27 crore and Rs 35 crore respectively.
• The capacity Utilization of IBB is 90% while that of ATBS is 75% during the quarter under review.
• For the full year, the company has produced 12500 MT of IBB and 7000 MT of ATBS. The revenues from both IBB and ATBS constituted 50% each of the total revenues in FY10. Of the total production of IBB and ATBS, 95% of ATBS and 70-75% of IBB is exported.
• The long term debt of the company is Rs 40 crore. The outstanding forex loans were to tune of USD 8.6 million with average cost of debt 7-8%.
• The company has spent Capex of Rs 40-50 crore in FY10 and expects Rs 70-80 crore in FY11. Nearly Rs 40 crore of FY11 capex is placed by debt, while the remaining by internal accruals.
• Expects Isobutylene plant to be completed by June 2010. Targets production of 3000 MT of Isobutylene, in nine months period between July 2010 & March 2011.
• Company has planned to manufacture Alkyl Acrylamides i.e. Di-Acetone Acrylamide (DAAM), Tertiary Butyl Acrylamide (TBA) and Tertiary Octyl Acrylamide (TOA) as part of diversification plans. Besides above, it is also setting up a project to manufacture 1000 TPA total capacity of DAAM & TOA and 700 TPA of TBA. Along with the production of DAAM some small quantity of Isphorone will also be produced. This projected is expected to be completed by CY10.
• Expects tax rate to continue at 21-23% in FY11. However from FY12, the company has to pay full tax and so tax rate may go up.
• Margins in IBB segment stood at 21% in FY10. However, with functioning of one more IBB plant from IOL chemicals, the margins may under come pressure and so expects to maintain 15-20% margins in FY11. On the other hand, the over all margins of the company is expected to improve owing to dip in the share of IBB and increase in share of ATBS and inclusion of other monomers. Demand for ATBS is expected to pick up and the company anticipates better margins from this segment.
• As the raw materials of the company were derivatives of crude oil products, the prices of the company monomers were a function of crude oil prices.
• Going ahead, the company expects to reach Rs 1000 crore of Topline in next 5 years. As a part of diversification strategy, the company is expanding its product basket of monomers and doesn't want to rely on a single product.
• During the year Company has paid Interim Dividend of 15% i.e. Rs.0.30 per equity share of face value of Rs.2/- each. The Board of Directors has recommended final dividend of 35% i.e. Rs.0.70 per equity share of face value of Rs.2/- each for the year 2009-10