Will Atul Ltd be able to maintain its past performance? – Quarter 1 FY23 Highlights

(A) Last 4 Quarters Performance – YOY Of Atul Ltd

Atul Ltd - preceding quarter performance

Key Margins – Quarterly

Atul Ltd - Quarterly key margins

(B) Quarter on Quarter Performance of Atul Ltd

Atul Ltd - Quarter performance

(C) Annual Performance (YOY) of Atul Ltd

Atul Ltd - Annual performance

(D) Key Highlights – Q1 FY23

  • Company grew its sales by 16% in volume terms.
  • Meanwhile its sales grew by 36.7% from Rs 1080.20 in Q1 FY22 to Rs 1476.85 in Q1 FY23.
  • Moreover its Life Science Chemical and Performance & Other Chemical segment grew by 37.5% and 37.6% respectively.
  • Despite higher raw material, energy and freight cost life Science Chemical & Other Chemical segment reported a sharp jump in EBIT margins when compared to last year.
  • Life Science Chemical segment reported 16.4% margins vs 14.1% in Q4FY22. Meanwhile Performance & Other Chemical segment reported 16.9% vs 12.9% in Q4FY22.
  • Company has added the exceptional loss of Rs 35.08 Cr on account of assets which are destroyed by fire and its claim is under process with the insurance company.
  • In Q1FY23 Life Science Chemical contributed 31%, Performance & Other Chemical contributed 68% while other segment contributed 1%.
  • Atul is implementing projects at a total investment of Rs 1750 Cr in the parent company, Atul products, Amal Specialty and Atul Finserv. At full capacity it is expected a revenue of Rs 6000 Cr.

Outlook

  • Indian share of global specialty chemical industry will double in next 5 years to 6% by 2026 from 3-4% in FY21.
  • Atul get benefits from anti-dumping duty for some of its products and withdrawal of this measure may impact profitability.
  • Moreover Atul has gradually reduced its dependence on anti-dumping duty and hence the impact in case of a change or withdrawal in anti dumping duty would also reduce gradually.

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References:  Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets & Management Interviews, Industry Publications.

Disclaimer: The report only represents the personal opinions and views of the author. No part of the report should be consider a recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.

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