Vinati Organics' net profit declined by 4% to Rs 64.14 crore on a 6.3% fall in net sales to Rs 223.47 crore in Q3 FY21 over Q3 FY20.
Profit before tax in Q3 December 2020 stood at Rs 70.60 crore, down by 20.5% from Rs 88.86 crore in Q3 December 2019. Current tax outgo declined by 79.3% year-on-year (YoY) to Rs 4.08 crore in the third quarter.
"Due to covid related slowdown, financial numbers during the 3rd quarter ended 31.12,2020 have been impacted, the company said.
Separately, the company informed that its board had approved a scheme of amalgamation of Veeral Additives (VAPL) into Vinati Organics (VOL) in their meeting held on 2 February 2021.
VAPL is into the business of manufacturing Antioxidants (AO's). India has a demand of 10000 MT for these AO's and the global demand is around 300000 MT. VAPL has a capacity of 24000 MT per annuum. The acquisition of VAPL is a forward integration for VOL as Butyl Phenols will be the key raw materials to manufacture these AO's. After the acquisition, VOL will be largest and the only integrated manufacturer of these AO's in India. This acquisition will allow VOL to add a new revenue stream of specialty chemicals which have good growth potential both globally as well as domestically. The growth is driven by increased consumption of various plastics like LDPE, LLDPE and PP etc. VAPL has the potential to clock Rs 500 crore in revenue (Rs 300 crore incremental revenue) for VOL.
Vinati Organics is engaged in the manufacture of organic and inorganic chemical compounds nitrogenous energetic compounds (NEC).
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Vinati Organics shed 0.84% to Rs 1206.90, extending fall for second day. The stock has lost 2.1% in two sessions from its recent closing high of Rs 1,232.60 recorded on 1 February 2021.
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