Based on latest update from management and information from various broker reports:
Recently Lubrizol has exited the ATBS business. Lubrizol had ~15% market share and good pricing power due to its brand. Vinati has now opportunity to get this market share and can further gain pricing power due to this. Interesting thing is that they can command slightly higher price with existing customers as well due to lesser competitive intensity.
The new planned capex of IBB would take overall capacity to 25,000 TPA and this can be another contributor to incremental revenue. This should ideally show in numbers by FY19 if capex goes as planned.
They have already announced capex plans for mega capex for PAP. This is majorly imported from China currently and the patented process of Vinati is much efficient. The cost of PAP is already rising due to structural issues in China. This capacity of 30,000 TPA is expected to come by 2020.
Also, new project of Butyl Phenol is expected to start production by end of FY19.
Overall, multiple boosters and earnings visibility for next few years. Although currently valuation looks bit stretched but if all of the above goes well on track then earnings can surprise us.
Disclosure: Invested; No transaction during last 30 days