Atul Q1 Review - Strong Return Ratios, Operating Leverage, Capex To Lead Growth: Dolat Capital

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Dolat Capital Report

Atul Ltd.’s revenues in Q1 FY22 were up by 63.5% y-o-y to Rs 10.80 billion albeit on a lower base of Q1 FY21 which was impacted by Covid-19 disruptions. (our estimate- Rs 11.4 billion).

Gross margins saw a contraction of 495 basis points y-o-y to 52.0% due to higher input costs which we believe have risen with increase in crude oil prices.

Atul's Ebitda grew by 48.8% y-o-y to Rs 2.36 billion (our estimate- Rs 2.63 billion) while Ebitda margin saw a contraction of 216 basis points y-o-y to 21.9%.

Profit after tax grew by 40.9% y-o-y to Rs 1.66 billion (our estimate– Rs 1.79 billion) supported by a lower tax rate of 26% in Q1 FY22 versus 28% in Q1 FY21.

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