Atul Ltd

Basic Materials — Specialty Chemicals · NSE

₹6,200.00+₹3.00 (+0.05%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by high debt relative to equity, small-cap size, which brings sharper price swings.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Atul Ltd — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Atul Ltd manufactures and sells chemicals and other chemical products worldwide.

IndustrySpecialty Chemicals

SectorBasic Materials

Employees3,338

Annual revenue₹6,203 Cr

How does it make money?

Turns over ₹6,203 Cr a year. Of every ₹100 of sales, about ₹11 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 3,338 employees supports ₹1.86 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin18.7%

Net margin10.9%

Revenue / employee₹1.86 Cr

Who are its competitors?

The closest listed comparisons in its industry are ASIAN PAINTS LIMITED, PIDILITE INDUSTRIES LTD, SRF LTD, UPL LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

PIDILITE INDUSTRIES LTDP/E 57.8x · ROE 24.4%

SRF LTDP/E 33.8x · ROE 15.4%

UPL LIMITEDP/E 21.5x · ROE 6.1%

What is its competitive advantage?Little sign of one

Returns on capital of 13.5% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE13.5%

ROE10.9%

Peer median ROE22.3%

What is the outlook?

12 analysts covering the stock expect revenue to grow about 10.1% and earnings to grow about 12.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+10.1%

Est. earnings growth+12.0%

Analysts12

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +16% while net margin moved +14% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+16%

Margin effect+14%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.21 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings

Quality vs. Valuation

Company Quality

60/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

66/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

22.9x

3Y Median

40.5x

40 monthly readings · mean 44.6x · range 25.7x–72.7x

Sector Median

40.4x

median of 4 sector peers

🟢Current valuation is approximately 43% below its 3y median of 40.5x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 43% below the peer median of 40.4x.

vs. its own history

Cheap

40.5x median over 40 months · -43%

vs. sector peers

Cheap

40.4x median of 4 peers · -43%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

22.9x

P/B

2.93x

EV/EBITDA

15.9x

PEG

2.38

Dividend Yield

0.48%

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 16.3% to 18.7% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Valuation below its historical average
At 22.9x the stock trades 43% below its own median of 40.5x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Debt is rising
Total debt is up 250% over 3 years — worth checking what it funded.
Receivables growing faster than sales
Receivables are up 50% against revenue growth of 16% — customers are taking longer to pay.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 250% over 3 years, from ₹52 Cr to ₹183 Cr.
🔴High leverageFinancial
Debt/Equity of 2.91x — earnings must service borrowings before shareholders see anything.
🟡Receivables growing faster than salesFinancial
Receivables up 50% against revenue up 16% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 16.3% to 18.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 43% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 43% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 2.91x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 50% against revenue up 16%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 4.9% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 17%✓ 18.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✓ 4.9% CAGR
Latest reported year was 25.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹848 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 11%✓ 13.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 6 neutral · 1 weak

Market Cap

₹18,254 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

22.9x

Fair

Fairly valued against the generic band

P/B Ratio

2.93x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹270.18

Profitable

Profitable on a per-share basis

ROE

10.9%

Moderate

Moderate capital efficiency

ROCE

13.5%

Moderate

Moderate return on the capital in the business

Debt/Equity

2.91x

High

High leverage

Revenue Growth (YoY)

25.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

92.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.48%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹848 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹6,200

P/E (Forward)

20.0x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

17.1%

Good

Healthy core-business profitability

Net Margin

12.0%

Good

Strong bottom-line conversion

Current Ratio

3.61

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.21

Defensive

Steadier than the market

52W Range Position

39%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

6025.5 / 6313.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

57.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹5,366 Cr	₹4,668 Cr	₹5,510 Cr	₹6,203 Cr	+4.9%
EBITDA	₹876 Cr	₹686 Cr	₹963 Cr	₹1,158 Cr	+9.8%
EBITDA Margin	16.3%	14.7%	17.5%	18.7%	—
PAT (Net Profit)	₹514 Cr	₹323 Cr	₹484 Cr	₹678 Cr	+9.7%
EPS	₹174.15	₹109.54	₹164.37	₹230.25	+9.8%
ROE	11.0%	6.3%	8.6%	10.9%	—
ROCE	14.1%	8.3%	11.7%	13.5%	—
Total Debt	₹52 Cr	₹237 Cr	₹202 Cr	₹183 Cr	+51.9%
Free Cash Flow	-₹168 Cr	₹164 Cr	₹333 Cr	₹848 Cr	—

🟢 Revenue has grown at 4.9% a year over 3 years.

🟢 EBITDA has grown at 9.8% a year over 3 years.

🟢 EBITDA Margin has risen from 16.3% to 18.7% over 3 years (+2.3 pts).

🟢 PAT (Net Profit) has grown at 9.7% a year over 3 years.

🟢 EPS has grown at 9.8% a year over 3 years.

🟡 ROE has held roughly flat at 10.9% over 3 years.

🟡 ROCE has held roughly flat at 13.5% over 3 years.

🔴 Total Debt has grown at 51.9% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹168 Cr to ₹848 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹7,900 Cr

Total Liabilities

₹1,604 Cr

Total Debt

₹183 Cr

Cash & Equivalents

₹85 Cr

Operating Cash Flow

₹1,023 Cr

Capex

-₹175 Cr

Shareholding (proxy)

Institutional Holding

28.8%

Insider Holding

46.2%

Corporate Actions

Next Earnings

23 Oct 2026

Dividend Rate

₹30

Ex-Dividend Date

17 Jul 2026

Analyst Consensus

Recommendations

9 Buy · 2 Hold · 1 Sell

Target Price (Mean)

₹7,837.58

+26.4% vs CMP

Target Range

₹5,870 – ₹9,111

Peer Comparison

Company	P/E	ROE
ASIAN PAINTS LIMITED	46.9x	22.3%
PIDILITE INDUSTRIES LTD	57.8x	24.4%
SRF LTD	33.8x	15.4%
UPL LIMITED	21.5x	6.1%

Recent News

1 positive4 mixed1 general

Atul (NSEI:ATUL) Stock Forecast & Analyst Predictions

Simply Wall Street, 14 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Atul (ATUL) Share/Stock Price Live, NSE

TechGraph, 09 Oct

ATUL Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Atul stock reports 92 percent profit growth in Q1 FY27

ad-hoc-news.de, 05 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Atul Ltd. (ATUL) Share Price Surges 6.1% Amid Strong Market Performance

Univest, 27 JulPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Atul Ltd posts 92% profit surge, revenue up 25% in Q1FY27

scanx.trade, 24 JulResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate12/20

🟡Financial HealthAdequate12.5/20

🟡GrowthModest10.4/20

🟢ProfitabilityStrong9.9/15

🟢ValuationAttractive10.7/15

🟡RiskModerate4.8/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 17%18.7%
✓Revenue growth stays above 4% a year4.9% CAGR
✓Free cash flow remains positive₹848 Cr
✓Debt / EBITDA stays below 2x0.2x
✓ROCE stays above 11%13.5%