Atul Ltd's Q3FY19 standalone net profit rises 77.13% yoy to Rs116.89cr: In-line with Estimates

The company’s standalone revenue stood at Rs1,019.49cr, up 26.85% yoy and 1.2% qoq.

Jan 18, 2019 01:01 IST India Infoline Research Team

Atul Ltd Q3FY19

Standalone Results Q3FY19: (Rs. in cr)

Q3FY19 YoY (%)
Revenue 1,019.49 26.9
EBITDA 211.44 67.7
EBITDA Margin (%) 20.7 505
Net Profit (adjusted) 116.89 77.1
***EBITDA margin change is bps
Atul Ltd's Q3FY19 revenue came in at Rs1,019.49cr, an increase by 26.9% yoy. The operating profit in Q3FY19 came in at Rs211.44cr, a substantial increase by 67.7% yoy. The Q3FY19 EBITDA margin expanded significantly by ~505bps yoy to 20.7%. The net profit after tax stood at Rs116.89cr, an increase by 77.1% yoy. The revenue and net profit are in-line with estimates. However, the EBITDA beat the estimate of Rs193cr by 10%.

• The rise in revenue by ~27% was likely driven by higher volume growth coupled with improvement in the product mix and realizations. Gross margin increased ~165bps yoy to 47.4% in Q3FY19 on account of the above factors.
• The EBITDA margin expanded by ~505bps yoy to 20.7% in Q3FY19 on likely higher utilization of capacities across products leading operating leverage.
• The segmental revenue from Life Science Chemicals increased significantly by 27.2% yoy to ~Rs334.1cr in Q3FY19. The segmental profit increased by 79.4% yoy to ~Rs52.6cr in Q3FY19 with EBIT margin expansion by ~457bps to 15.7%. This segment consists of APIs, API intermediates, fungicides, and herbicides.
• The segmental revenue from Performance and Other chemicals increased by 28.1% yoy to ~Rs758.4cr in Q3FY19. The segmental profit increased by 77.8% yoy to Rs142.9cr in Q3FY19 with EBIT margin expansion of ~527bps yoy to 18.8%. This segment consists of adhesion promoters, bulk chemicals, epoxy resins and hardeners, intermediates, perfumery ingredients, and textile dyes.
• The effective tax rate of the company stood at ~35% during Q3FY19 vs ~33% in Q3FY18. The company also witnessed an exchange loss of ~Rs10cr during the quarter vs. ~Rs4cr during Q3FY18, on account of likely INR appreciation vs. USD (Atul is a net exporter and has lower hedges against the foreign currencies). All these factors led to a drag in the net profit of the company.





Technical View:

Atul Ltd is currently trading at Rs. 3,542, up by 51.75 points or 1.48% from its previous closing of Rs. 3,490.25 on the BSE.
The scrip opened at Rs. 3,520 and has touched a high and low of Rs. 3,580 and Rs. 3,510 respectively. So far 52,197 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 50 DMA.

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