ATUL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 How I’m Thinking About This

You’re asking for a full-spectrum fundamental analysis of Atul Ltd, with a clear numeric rating and actionable guidance. I’m weighing its financial strength, valuation metrics, business model, and technical signals to determine whether it’s a good long-term bet and where to enter if undervalued.

📊 Core Financials Breakdown

Revenue & Profitability

TTM Revenue: ₹5,739 Cr

Net Profit (TTM): ₹500 Cr

Recent quarterly dip: ₹97.7 Cr vs ₹126 Cr → -10.5% QoQ

Net margin: ~7.5% — modest for specialty chemicals

Return Metrics

ROCE: 11.9% — decent operational efficiency

ROE: 8.64% — below ideal for high-growth stocks

Cash Flow & Debt

Debt-to-equity: 0.00 — pristine balance sheet

Operating CF: ₹603 Cr — flat trend, not scaling with revenue

💰 Valuation Indicators

Metric Value Interpretation

P/E Ratio 43.3 Overvalued vs industry PE of 33.9

P/B Ratio ~3.48 Premium valuation

PEG Ratio -5.34 Negative due to earnings decline

Intrinsic Value ~₹6,000 Slightly overvalued at current price

Despite strong fundamentals, valuation is stretched. The PEG ratio signals earnings contraction, which is a red flag.

🏭 Business Model & Competitive Edge

Industry: Specialty chemicals — cyclical but high-margin niches

Moat: Diversified portfolio + JV with Buckman for water treatment

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Challenges: Weak operating profit CAGR (-2.63% over 5 years)

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Institutional Holding: 33.76% — shows smart money interest

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📉 Technical & Entry Zone

Current Price: ₹6,545

DMA 50/200: Slightly below both — mild bearish trend

MACD: -28.2 — bearish momentum

RSI: 55.1 — neutral zone

📌 Suggested Entry Zone: ₹6,200–₹6,350

This range offers a better margin of safety and aligns with technical support levels

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🕰️ Long-Term Holding Guidance

Hold if already invested, but monitor earnings and margins

Buy on dips near ₹6,200 if bullish on specialty chemicals

2026 Target Price: ₹6,785–₹6,850 based on technical projections

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⭐ Fundamental Rating

3.7

Strong balance sheet and niche positioning, but valuation and recent earnings softness temper enthusiasm. Let me know if you’d like a peer comparison or a deeper dive into its quarterly results.

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stockanalysis.com

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www.marketsmojo.com

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stockpricearchive.com

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