Specialty chemical company Vinati Organics Ltd reported a 28.1% year-on-year decline in net profit to ₹78.4 crore for the second quarter, compared with ₹109 crore in the corresponding quarter last year, according to reports from CNBC TV18. Revenue from operations declined 2.3% year-on-year to ₹680 crore from ₹696 crore. The company's earnings before interest, tax, depreciation and amortisation (EBITDA) fell 26.6% to ₹125.5 crore from ₹171 crore a year ago. The EBITDA margin contracted by 610 basis points to 18.5% from 24.6% in the year-ago quarter, as reported by CNBC TV18.
Vinati Organics announced an aggregated capital expenditure plan of ₹500 crore for the company and its wholly owned subsidiary, Veeral Organics Private Limited, to develop new specialty chemicals, as reported by CNBC TV18. The Board of Directors has now formally approved this investment, with the proposed greenfield projects focusing on specialty chemicals used in resins, fragrances and personal care, water treatment solutions, oil field applications and other segments. The entire investment will be funded through internal accruals, avoiding external debt, preserving the company's balance sheet strength while executing growth plans. The projects are expected to be commissioned within the next two years, according to the regulatory filing reported by CNBC TV18.
The ₹500 crore outlay will fund greenfield initiatives across multiple high-value chemical segments, with the company noting these projects offer scope for further expansion into adjacent product segments based on market demand and growth opportunities. The proposed projects are all greenfield initiatives, indicating the company's focus on building new capacity rather than expanding existing facilities. This strategic approach allows Vinati Organics to enter new markets while maintaining its focus on specialty chemicals, which typically command higher margins than commodity chemicals.
Shares of Vinati Organics Ltd ended at ₹993.25, down by ₹45.65, or 4.39% on the BSE, according to CNBC TV18. The decline in share price reflects investor concerns over the company's quarterly performance and the significant capital expenditure commitment despite the challenging operating environment. However, the decision to fund the entire ₹500 crore project through internal accruals highlights strong cash generation capabilities and maintains financial flexibility while scaling capacity in niche markets.
