Atul Q1 Review – Continues To Face Margin Headwinds Owing To High Input Prices: Dolat Capital

Atul Ltd.’s reported a revenue growth of 36.7% YoY to Rs 14.8 billion (our estimate: Rs 14.5 billion) supported by healthy growth in both life sciences and performance and other chemicals business.

Gross margins continue to remain under pressure contracting by 351 basis points YoY to 48.5% (up 105 bps QoQ) as crude oil prices remained at elevated levels during the quarter.

Adjusting for a one time write off of Rs 350.8 million in the value of assets destroyed by fire, other expenses grew by 34.3% while power and fuel costs rose by 61.5% YoY.

Atul’s adjusted Ebitda came in at Rs 2.7 billion (our estimate : Rs 2.8 billion) with margins dipping by 371 bps YoY to 18.1% (up 318 bps sequentially). Adjusted profit after tax was up by 20.3% YoY to Rs 1.99 billion (our estimate : Rs 1.8 billion).