Vinati Organics Expects 15-20% Growth FY22 Onwards

While the pandemic marred the current financial year, Vinati Organics Ltd. expects its revenue to grow 15-20% per annum from FY22.

The growth trajectory is in line with industry expectations, Managing Director and Chief Executive Officer Vinati Saraf Mutreja told BloombergQuint in an interview. As the national lockdown froze economic activities and workers migrated to villages, India’s specialty makers, too, faced logistics and labour issues. While that has dissipated, Mutreja said the demand slowdown from the pandemic still lingers. That, she expects, to hurt earnings in the second and third quarters of the fiscal ending March 2021.

The drop in demand, according to her, has been mainly due to the oil and gas sector. The company’s three other areas of business—agrochemicals, pharmaceuticals and water treatment—remain stable.

The long-term outlook for the specialty chemical sector, according to Mutreja, is bullish. There’s increased interest in companies looking to diversify their supply chains from China. Companies from Euorpe and the U.S. are looking at India as an alternative. China, at the same time, is looking to shift more toward artificial intelligence and technology because of its environmental crackdown, she said.

Besides, Vinati Organics has announced a capital expenditure of Rs 150 crore to produce four new specialty chemical products for agrochemicals, dyes and plastic additives industries, and expand its para-tert-butylbenzoic acid capacity. The company, Mutreja said, expects to grow its revenue by manufacturing niche value added products.

Vinati Organics—the world's largest manufacturer of Isobutylbenzene, a raw material for painkillers—is already making three types of butylphenol (used in fragrances, plastics, resins), and expects to start manufacturing the fourth type by November, she said.

Watch the full conversation here: