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Motilal Oswal Report
Atul Ltd. reported inline revenue in Q4 FY23, with a 17% QoQ decline in the life science chemicals segment and a flat show in the performance and other chemicals segment. Gross margin came in at 45.8% in Q4 FY23, while Ebitdam declined 110 basis points QoQ to 12.5%.
The life science chemicals segment's contribution to Ebit improved to 84% in Q4 FY23 (from 82% in Q3 FY23), whereas the contribution of performance and other chemicals to overall Ebit fell to 15% in Q4 FY23 (from 16% in Q3 FY23).
The management highlighted that demand was subdued in key end-user industries such as fragrance, personal care, pharmaceuticals and textiles, as many companies adopted a wait-and-watch policy, which led to lower capacity utilisation at their plants and subsequently at Atul's plants.
Due to delays in project implementation, Atul was unable to achieve desired performance in product quality and sales volume. Finished goods prices, too, fell more than raw material prices and fuel prices remained high throughout the year, which led to margin pressure. Consolidated Ebitdam was the lowest in the past 22 quarters.
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