ATUL - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Investment Rating: 3.6

Here’s a comprehensive breakdown of Atul Ltd. based on your parameters

🧠 Fundamental Analysis

Valuation

Stock P/E (39.5) vs Industry P/E (34.4) → Slightly overvalued

PEG Ratio (-6.50) → Negative PEG suggests earnings growth is not keeping pace with valuation

Price to Book (≈3.5) → Reasonable, but not cheap

Profitability

ROE (9.10%) and ROCE (12.8%) → Moderate returns, not exceptional for long-term compounding

EPS (₹170) → Strong earnings base

Dividend Yield (0.37%) → Low, not ideal for income-focused investors

Debt to Equity (0.04) → Excellent financial health, almost debt-free

📈 Technical & Trend Indicators

Current Price (₹6,719) is below both DMA 50 (₹7,033) and DMA 200 (₹6,800) → Bearish trend

RSI (35.4) → Near oversold zone, potential for technical bounce

MACD (-158) → Strong bearish momentum

Volume is below average → Weak participation

🏁 Ideal Entry Price Zone

Based on valuation and technicals

₹6,300–₹6,500 would be a more attractive entry zone

This aligns with support near 200 DMA and RSI oversold levels

🧳 Exit Strategy / Holding Period

If you already hold the stock

Holding Period: Minimum 3–5 years to allow for cyclical recovery and margin expansion

Exit Strategy

Partial exit if price crosses ₹8,000+ and valuation remains stretched

Hold if ROE/ROCE improve and PEG turns positive

Reassess if fundamentals deteriorate or price breaks below ₹6,000

🧪 Final Verdict

Atul Ltd. is a financially sound but moderately overvalued stock with subdued growth metrics. It’s not a top-tier long-term compounder at current levels, but could be a decent pick if accumulated near support zones and held patiently.

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