A brief overview of second quarter results of Atul Ltd.
Co reported a growth of 19.0% in revenues over the same quarter last year and 0.7% sequentially. Profitability margins continued the downward trend with quarterly EBITDA margins lowest in the last two years. Whereas EBIT margins of the segment Life Science Chemicals increased from 9.5% in Q2FY22 to 24.7% in Q2FY23, those of Performance and Other Chemicals reduced from 15.4% to 7.4% over the same period. Co attributes this decline to falling selling prices and high energy costs, which are direct fallouts of the situation in Europe.
Co has been investing in additional capacities over the last few years but continues to be debt free. It plans to incur capex of around 500 to 550 crores per annum for next two years, ending FY24, towards capacity addition in polymers, colour and aromatics segments, setting up methyl chloro-phenoxy acetic acid and dextromethorphan facilities, setting up of caustic soda plant along with captive coal-based power plant.
This remains one of my long term holdings – strong corporate governance, has been debt free for a long time and still keeps adding capacities. If you would like to listen into my quick take on this quarter then refer the link: Atul Ltd’s second quarter results – YouTube
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