Atul Ltd. share price target

Atul (ATLP) reported revenue 7% above our expectation in 3QFY25. Revenue in the Life Science Chemicals segment increased 23% YoY, while it rose 24% YoY in the Performance & Other Chemicals segment

Topline rose 17% y-o-y and 5% q-o-q, with operating Profit of Rs. 243 crore and adjusted
PAT of Rs. 112 Crore surpassing our estimates, attributed to margin enhancements in
LSC and POC.

Atul (ATLP) reported in-line revenue in 2QFY25. Revenue in the Life Science Chemicals segment increased 13% YoY, while it rose 18% YoY in the Performance & Other Chemicals segment.

ATLP has burned for three long years (FY22-24) and it is a classic case of valuations perched higher despite a significant decline in earnings. During FY22/FY23/ FY24, EBITDA declined 1%/15%/18% YoY .

Consolidated revenue for Q1FY2025 was Rs. 1,322 crore, reflecting a 12% increase from the previous year and a 9% rise from the previous quarter, slightly exceeding our estimate of Rs. 1,314 crore by 1%.

Atul (ATLP) reported in-line revenue in 4QFY24. Revenue in the Life
Science Chemicals segment declined 8% YoY, while it increased 5% YoY in
the Performance & Other Chemicals segment.

Helped by base effect (from the pandemic), Atul's income from operations by a little enthusing 63.5% to Rs 1080.20 crs from just Rs 660.56 crs in the same quarter a year ago; though quarter on quarter income from operations slid 3.2%. Performance and other chemicals business accounted for most of the swell for its sales advanced by a blistering...

Atul Limited (Atul) reported consolidated revenue of Rs. 1,002 crore (down 4.2%; up 51.7% q-o-q), which was 7.9% above our estimate of Rs. 929 crore. Revenue beat was on the account of betterthan-expected revenue from life science chemicals segment at Rs. 348 crore (up 5.3% y-o-y; up 28.3% q-o-q), while revenue from performance and other chemicals segment was largely in-line at Rs. 690 crore (down 7.7% y-o-y; up 64% q-o-q). The sharp sequential improvement in revenue can be attributed to higher demand from key user industries in the domestic market as economic activities recovered sharply post unlockdown by the government. EBITDA margin came in at 26.1% (up 460 bps y-o-y; up 204 bps q-o-q), which was also above our estimate of 25% due to higherthan-expected margin in the performance and other chemicals segment (EBIT margin up 411 bps y-o-y to 23.1%). The improvement in EBITDA margin was on account of better operating leverage...

Atul Ltd's result was yet another surprise on the margin front, with sales too slowly reverting to pre-covid levels. Sales came in above our estimate at Rs 10.02bn (D.est: Rs 9.07) down by 4.2% YoY. EBITDA (D.est: Rs 2.06 bn) grew by 16.4% YoY to Rs 2.61bn, with a strong EBITDA margin of 26.1%, an increase of 460 bps YoY. The company has controlled its other expenses and power and fuel costs,...

Scarcely unscathed by the horrendous pandemic which triggered countrywide lockdown and forced suspension of Atul's manufacturing plants, beside others, its income from operations plunged by a little pleasing 36.5% to Rs 660.56 crs in the first quarter compared to Rs 1040.55 crs in the same quarter a year ago. Due to its far lesser reliance on essentials when compared to life science chemicals, performance and other chemicals barely managed to evade the brunt of the pandemic for its revenues slid by a little gratifying, though barely sustainable, 42.6%,...