Atul (500027) Q4 23/24 earnings summary

Executive summary

• Standalone revenue from operations declined 14% year-over-year to ₹4,358 cr, mainly due to a 19% drop in price realization despite a 5% increase in volume; consolidated revenue fell 13% to ₹4,726 cr, with Life Science Chemicals (LSC) segment sales down 27% and Performance and Other Chemicals (POC) down 5%.

• Standalone profit before tax (PBT) dropped 30% to ₹510 cr, and consolidated PBT fell 34% to ₹451 cr, impacted by lower sales, reduced exchange gains, higher depreciation, and losses in subsidiaries/joint ventures.

• The company completed a buy-back of 72,000 shares for ₹49.93 cr and declared a dividend of ₹20 per share, resulting in a total outflow of ₹58.88 cr.

Financial highlights

• Standalone net profit decreased 30% year-over-year to ₹385 cr; consolidated net profit attributable to owners was ₹323 cr, down from ₹514 cr.

• Standalone EBITDA margin was 16.18% (down from 17.89%); net profit margin dropped to 8.95% from 11.04%.

• Return on net worth declined to 7.96% from 12.40%.

• Operating cash flow was ₹623.71 cr, with capital expenditure of ₹342.96 cr.

Outlook and guidance

• The company expects to overcome start-up issues at the new caustic plant by Q1 FY25.

• Growth in the agrochemical and pharmaceutical sectors is anticipated, with India’s agrochemical market projected to grow at 6-6.5% CAGR and the domestic pharma market expected to reach US$65 bn by 2024.

• The company plans to focus on value-added products, regulatory expansion, and efficiency improvements.