1
Please refer to important disclosures at the end of this report
1
1
Atul Ltd is an integrated chemical company. Over the years, Atul has
emerged as a prominent player in many of the products it manufactures, not
only in India but also in the global market having strong clientele including
global chemical majors. It also enjoys fairly good market share in many of
the product segments.Further, its well-diversified product-range helps Atul in
mostly offsetting the adverse performance of few product lines in some years
with better performance of remaining products in those years. Atul has
entered in to an agreement to set up a manufacturing Joint Venture (JV) with
Akzo Nobel for the production of Monochloroacetic acid (MCA) at Atul’s
plant in Gujarat with capacity of 60,000 metric tonne per annum (MTPA). A
part of its output would be used for Atul’s captive consumption. The project is
expected to be completed by December 2018 at an envisaged cost of `200cr
to be funded in project D/E ratio of 1:1. Besides, Atul has incurred capital
expenditure of around `704cr during FY15-FY17; returns from which are not
yet fully realised. Atul’s debt has reduced from `392.4cr in FY12 to
`167.69cr in FY17.It has reported top line and bottom line growth of 10% &
29% over last 5 years and operating margins has also improved from
11.90% in FY12 to 19.68% in FY17.Atul’s raw material cost to revenue has
declined from 59.74% in FY12 to 49.46% in FY17 and cash flows has
improved from `88.61cr in FY12 to `401.73cr in FY17. The company has a
Return on Equity (RoE) of 11.82% and trading at PE valuation of 39.19x of
TTM earnings. Hence Buy.
BUY
CMP `2999
52 Week High / Low
3020/1958.25
Avg. Daily Volume
4,591
Agrochemicals
Market Cap (` cr)
8,893
10
BSE Sensex
34,415
Nifty
10,613
Face Value (`)
Reuters Code
ATLP.NS
ATLP:IN
0.8
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Atul Ltd
Others | Agrochemicals
Jan 10, 2018
2
Atul |Agrochemicals
June 5, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Atul
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)