Mehabe score: 5 G Factor: 5 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 7.
Description
Atul Ltd. is a diversified and integrated Indian chemical company (a part of Lalbhai Group, Gujarat). The products of the company are used in various Industries and come mainly under two segments, Life Science Chemicals and Performance and Other Chemicals under 9 Businesses. #
Main Points
Evolution of the company over the years
Atul was earlier one of the largest dyestuff manufacturing companies in India; however, through its strong R&D initiatives, JV with multinational companies and acquisitions, Atul has expanded its product portfolio significantly over last few years in the areas of aromatics, crop protection, polymers and pharma intermediates which are speciality chemicals as compared to conventional dyestuff products. This shift in product mix has led to better profitability which has also shown greater degree of resilience compared to the scenario of around a decade back.Site:ATULMain Symbol:ATUL
Stock trades at 9198.0, above its 50dma 8837.33. It also trades above its 200dma 7444.7. The stock remains bullish on techicals
The 52 week high is at 9660.00 and the 52week low is at 4674.95
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has delivered good profit growth of 18.38% CAGR over last 5 years
Weakness
– Stock is trading at 7.11 times its book value
-The company has delivered a poor sales growth of 7.54% over past five years.
Competition
– The industry trades at a mean P/E of 26.1x. Atul trades at the industry’s max P/E of 42.66x. ATUL trades at a P/E of 42.7x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 7.0. ATUL has a G-Factor of 5 and Piotski scoreof 7.
– Average 1 month return for industry is 12.1%. The max 1- month return was given by Vidhi Specialty: a return of 41.08 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 1080.0 cr compared to Rs 661.0 cr for period ended Jun 2020, a rise of 63.4%
Operating Profits reported at Rs 236.0 cr for period ended Jun 2021 vis-vis 159.0 for period ended Jun 2020 .
Operating Margins contracted -220.3 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 56.09 compared to Rs 59.16 for previous quarter ended Mar 2021 and Rs 39.71 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 4151.0 cr for period ended TTM vis-vis sales of Rs 3731.0 cr for the period ended Mar 2021, a healthy growth of 10.1%. The 3 year sales cagr stood at 0.9%.
Operating margins shrank to 24.0% for period ended TTM vis-vis 25.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs 704.0 cr for period ended TTM vis-vis sales of Rs 656.0 cr for the period ended Mar 2021, rising 6.8%.
Company recorded a healthy Net Profit CAGR of 17.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 18.0% compared to 19.0% over the last 3 Years. – The stock has given a return of 95% on a 1 Year basis vis-vis a return of 48% over the last 3 Years. – The compounded sales growth on a TTM bassis is -9% vis-vis a compounded sales growth of 2% over the last 3 Years. – The compounded profit growth on a TTM basis is -3% vis-vis a compounded profit growth of 32% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 10.27% vis-vis 9.48% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 22.43% vis-vis 22.48% for Mar 2021
Conclusion
– is almost debt free.
– has delivered good profit growth of 18.38% CAGR over last 5 years – Stock is trading at 7.11 times its book value
-The company has delivered a poor sales growth of 7.54% over past five years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 8837.33 and is trading at 9198.0, thus bullish price action wise.
