Vinati Organics has experienced a notable decline in its share price, falling over 15% from its 52-week high level. On Wednesday, the stock opened at ₹1,980 per share on the BSE, reaching an intraday high of ₹2,010.05 and an intraday low of ₹1,972.35. Technical analysts suggest that the stock is currently undergoing a short-term corrective phase. They recommend a support level around ₹1,900, which may provide a crucial point for stabilizing the stock.

The decline in Vinati Organics' share price comes after it hit a new 52-week high of ₹2,330 earlier this month. Since then, the stock has dropped over 10% this month alone, indicating that momentum currently favors the bears. Analysts predict that further weakness may be expected in the near term, with the next key support at ₹1,900 and resistance at ₹2,080.

In a recent exchange filing, Vinati Organics announced its subscription to an additional 6,93,62,000 fully paid-up equity shares with a face value of ₹10 each, totaling ₹69.36 crore. This investment was made towards the rights issue of Veeral Organics Pvt. Ltd, a wholly-owned subsidiary of the company. The new shares will hold equal rank with the existing equity shares of Vinati Organics.

Regarding the company's Q1 results, Centrum Institutional Research noted a sequential decline in performance due to factors such as scheduled downtime, higher power prices, and logistical problems. Despite these challenges, the management remains optimistic about consistent pricing and a healthy demand environment across all product classes. The management projects a 20% compound annual growth in revenue and 25% EBITDA margins over the next three years.

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Centrum Institutional Research estimates a 20% revenue growth, 23% EBITDA growth, and 25% PAT CAGR for FY24-26. However, despite these positive projections, the brokerage continues to maintain a SELL rating on the stock, citing that the valuations remain rich with an unchanged target price of ₹1,602.

This comprehensive analysis highlights the recent performance of Vinati Organics, including its share price movement, strategic investments, and financial projections. Investors should consider these insights and monitor support levels and market conditions to make informed decisions.

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