Update on Atul Ltd by Motilal Oswal
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Poor show in Performance Chemicals segment leads to miss
Revenue stood in line at INR13.7b (+23% YoY,-1% QoQ).
Revenue from Performance Chemicals grew 29% YoY and 3% QoQ to INR10.5b.
Revenue from Life Science Chemicals grew 18% YoY but fell 8% QoQ at INR3.7b.
Gross/EBITDA margin stood at 47%/15% (-400bp/-320bp QoQ).
EBIT margin for the Life Science Chemicals segment expanded, while it declined for the Performance Chemicals segment.
Life Science Chemicals margin stood at 14% (+300bp QoQ). EBIT at INR519m.
Margin in the Performance Chemicals segment stood at 12% (-300bp QoQ) – further declining to multi-quarter lows. EBIT at INR1.3b (-14% QoQ).
EBITDA fell 19% YoY and 18% QoQ to INR2.1b.
PAT fell 23% YoY and 13% QoQ to INR1.4b (23% lower than our estimate), resulting in an EPS of INR46.1 in 4QFY22.
Contribution from the subsidiaries turned negative (PAT at -INR120m in 4QFY22 v/s INR75m/INR28m in 4QFY21/3QFY22).
The story has been similar in FY22, with revenue up 36% YoY to INR50.8b
EBITDA was flat YoY at INR9.1b, with EBITDA margin compression at 17.9% (from 24.6% in FY21). PAT stood at INR6b (-8% YoY).
The company has declared a dividend of INR25/share for FY22 (250% of face value).
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