>ATUL LIMITED (GEPL)

Atul Ltd is a totally integrated chemical company with manufacturing plants based at Valsad and Ankaleshwar in Gujarat. It operates through six business divisions, namely, Agrochemicals, Aromatics, Bulk Chemicals & Intermediates, Colors, Pharmaceuticals & Intermediates and Polymers. It is a part of Lalbhai Group of companies and has crossed the landmark of Rs. 1000 Cr turnover last year. It manufactures a range of chemicals products and caters to diversified user segments. Over the years, Atul Ltd had joint ventures with American Cyanamid Corp (1952), Imperial Chemical Industries plc (1955) and Ciba-Geigy Ltd (1960) namely, Cyanamid India Ltd, Atul Industries Ltd and Cibatul Ltd respectively.

FY 09 RESULTS
Atul Ltd came out with its full year results ending 31 March 09, with an increase in net sales by 16.5% y-o-y to Rs. 11.8 bn. The growth was mainly led by specialty chemicals which registered a healthy growth of 19% to Rs. 9.3 bn from Rs. 7.8 bn in FY08. The colors division registered a flat growth of 1.8% and stood at Rs. 3.2 bn as against Rs. 3.1 bn in F Y08.

Segment Revenues
The company achieved healthy EBITDA margins of 12.7%, up 570 bps from FY08. This was possible on account of lower input prices as compared to FY08 and is evident from the decline in raw material cost and cost of power and fuel. The raw material cost and cost of power and fuel as a percentage of net sales declined to 52% (as against 57% in FY08) and 9.4% (as against 10.6% in FY08) respectively. The absolute EBITDA excluding other income has more than doubled Rs. 1.4 bn as against Rs. 0.7 bn in FY08.

Interest expenses for FY09 rose by 25.3% y-o-y to Rs. 410 mn as compared to Rs. 327 mn in FY08. However the company has repaid some of it's debt, and currently has a net debt of Rs. 3.48 bn as against Rs. 4.28 bn in FY08. The Profit before tax from ordinary activities stood at Rs. 897.3 mn, an increase of 219% from Rs. 281.5 mn in FY08. However it reported forex losses to the tune of Rs. 440.4 mn as against a gain of Rs. 100.2 mn in FY08 which led to Profit before tax of Rs. 456.9 mn as against Rs. 381.7 mn in FY08. During the quarter the company had tax refund in respect of earlier years to the tune of Rs. 23 mn which inflated the profits to Rs. 378.7 mn as against Rs. 366.2 mn. The EPS for the year FY09 stood at Rs. 12.7 as against Rs. 12.3 in F Y 08.

Margins continue to remain at healthy levels
The uptrend in the commodity prices in the early of the year had put tremendous pressure on Atul's operating margins. It reported a very low operating margin of 4.3% for the quarter ended March 08. Since then Atul's has been consistently trying for higher pricing of its products from the clients and has been very successful in it. The efforts are now being realized with the rise in margins as shown in the chart. Secondly the recent cooling off of commodity prices is also driving the margin expansion.

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