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Atul Ltd.

BSE: 500027 Sector: Industrials
NSE: ATUL ISIN Code: INE100A01010
BSE 00:00 | 19 May 8230.10 -179.30
(-2.13%)
OPEN

8380.00

HIGH

8400.00

LOW

8201.00

NSE 00:00 | 19 May 8235.60 -191.15
(-2.27%)
OPEN

8326.25

HIGH

8403.75

LOW

8200.05

OPEN 8380.00
PREVIOUS CLOSE 8409.40
VOLUME 817
52-Week high 10975.40
52-Week low 7917.55
P/E 39.98
Mkt Cap.(Rs cr) 24,287
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 8380.00
CLOSE 8409.40
VOLUME 817
52-Week high 10975.40
52-Week low 7917.55
P/E 39.98
Mkt Cap.(Rs cr) 24,287
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Atul Ltd. (ATUL) - Chairman Speech

Company chairman speech

Dear Shareholders

Confronted by compounding crises 2020-21 remained an unprecedented fiscal the worldstrived to find its way back from a pandemic as corrosive to the commercial and politicalorder as it has been devastating to lives and livelihood. People businesses andgovernments in India too tried to endure normalise and progress. Team Atul hadmuch to do it remained steadfast to the legacy of the reflective Founder KasturbhaiLalbhai of integrity perseverance discipline creating more than consuming and largerpurpose to evolve further and brighten its path forward.

The GDP of the world at US$85 tn declined by 3.3%. While the GDP of China atUS$15 tn grew by 2.3% those of other key countries namely the USA Germany JapanFrance and the UK de-grew between 3% and 9%. India was no exception whose GDP at US$3 tnde-grew by 8% it has been tested anew. These times have taught three lessons: one thereis no substitute for self-discipline two health infrastructure needs fast upgradationand three interdependence not independence is the way. Our Company is aligned with thisand is taking its own small initiatives.

Sized at US$4 tn the world chemical industry declined by 2.6% and sized atUS$1.3 tn the world pharmaceutical industry grew by 1.6%. China at US$1.5 tn andUS$0.2 tn and the USA at US$0.7 tn and US$0.5 tn continued to be the biggest in the worldchemical industry and the world pharmaceutical industry respectively. The Indian chemicalindustry at US$136 bn declined by 6.1% and the Indian pharmaceutical industry at US$42 bngrew by 2.4%. As a part of these industries which fulfil so many day-to-day needs ofhumanity our Company is well positioned to serve its customers and thus seek to grow.

Sales of our Company at `3460 cr (of which `301 cr Retail) declined by 10% mainlybecause of the closure of plants during the first quarter and also due to adverse impactof manufacturing and sales in two businesses. Profit before tax (excluding one-timedividend income of `55 cr) at `773 cr was lower by 4%. EBIDTA margin at 26% was higher by200 basis points and RoCE at 28% was lower by 600 basis points. There indeed exists asignificant potential to better the performance. The Board has recommended adividend of 200% (against 150% normal dividend last fiscal).

There was a delay in completing projects of `725 cr (which are at different stages ofexecution) related to our Company; all of them will be implemented by the third quarter of2021-22. Thereafter standalone sales are expected to go to `4800 cr and sales includingthose from its subsidiary joint venture (JV) and associate entities (mentioned below) areexpected to go `5500 cr. Further our Company has taken up a new project via a newlyformed 100% subsidiary company (namely Atul Products Ltd) with an investment of `700 crwhich is expected to be completed in 2022-23.

Atul Bioscience Ltd (100% Atul holding) is stabilising its operations at Ambernathsite acquired in 2019-20. DPD Ltd (98% Atul holding) saw some benefit of theinvestment made in 2019-20 and is therefore making further investment during 2021-22. AmalLtd (49.85% Atul holding) is implementing an expansion project this is expected to becompleted in mid of 2021-22. Anaven LLP (50% JV with Nouryon Holding BV) hascompleted the project and will step up its operations in 2021-22. Rudolf Atul ChemicalsLtd (50% JV with Rudolf GmbH) is gradually increasing its market share.

Our Company and its subsidiary JV and associate entities have never undertaken so manyprojects at a time; so it is also a learning experience. Moreover the five mandatesI had shared with you last year enhance people productivity increase manufacturing andother efficiencies (focus on inputs; outputs will take care of themselves) pervadetechnologies in every function conserve cash while growing and evolving the future (thatis measure performance by free cash flow) and work with the customers on ideas of highpotential continue for they remain just as important.

The pandemic has brought uncertainties no doubt but it has also reinforced what wealready knew (about discipline teamwork for example) and also showed new ways of working(from home incorporating technology for example). I appreciate commitment andcontribution of every member of team Atul who has worked tirelessly to sustain theoperations. On behalf of the team I wish to assure all customers thatnotwithstanding the internal structure of our Company it will act as One Atul to deliverthe products services and solutions they may need.

Atul Foundation continued to support the community in its own small way. As anexample I have given a link (at the end of this letter) of the video clip of one of theinitiatives called Ankur (which incidentally was well-received also by the Government ofIndia). One more example I may share with you is that the cows valued at `66 lakhs givento 121 poor families have generated an income of `66 lakhs in one year for them giving asimple ‘payback' of one year. I trust you also agree that a business that does notcreate value for those it touches is not long for this world.

All this was and is possible because of team Atul (which consist of fivenationalities). It is the responsibility of our Company and team Atul to enhance peopleprocesses (performance management manpower planning recruitment and training) as init lies the essence of ultimate performance and governance of the business. Furthermorehow those in leadership positions behave lead (themselves) and envision will determinethe beliefs character and dimensions of our Company. Such positions will therefore haveto be held by people who provide exemplary self-leadership.

The involvement analysis incisive questioning and encouragement all based on longexperience and wisdom of the Non-executive Directors is augmenting and refining theefforts of the Management to better the performance and I value their association. Shareprices are not about the past but prediction of the future cash flows discounted back tothe present and your trust in and support to our Company as its shareholder thatit can deliver long-term place even more responsibility on the Management. Our Companypurpose is timeless; the way to approach it will continuously evolve.

The start of a new decade typically brings hope but the external environment at thistime particularly in India is blemished by the second ‘tsunami' of the pandemic.Amid this disruption it is easy to fall prey to pessimism but team Atul will move aheadwith hope and hard work. Our Company aims to reach new long-term milestonesin 2021-22 pushing its boundaries to become better and more prepared as it completes 70years of operations on March 17 2022 not settling for where it is but where it ought tobe for this I am optimistic. The best is yet to come.

Sincerely

Sunil Siddharth Lalbhai

Chairman and Manging Director

https://youtu.be/WDhe202OKyU

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