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Systematix Research Report
Atul Ltd.’s Q1 FY22 results were slightly above our estimates with sales/Ebitda/profit after tax growth of 64%/49%/41% y-o-y and down 3%/down 7%/down 5% q-o-q.
Sales were driven by a recovery in the performance chemicals division (up 79% y-o-y, down 8% q-o-q) and continued growth in the life science division (30% y-o-y, 13% q-o-q).
Geography-wise, Atul’s growth was led by export markets (49% of sales) while the domestic market was under pressure due to lockdown-led challenges.
Operating profit margin contracted 90 basis points q-o-q to 21.9% due to lower utilisation of mono-chloro-acetic acid in the first quarter of plant operations, a sharp increase in raw material prices (20-90%) and a decline in the spreads of key products.
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