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Informist, Thursday, Jul.16, 2026

By Rosalin Lenka

MUMBAI – Chemicals maker Atul Ltd. is expected to report a sharp jump in its net profit for the June quarter, supported by higher product prices and contribution from new projects, according to brokerages. Higher crude oil prices and raw material costs are likely to hit margins as the company has not fully passed these on to customers.

The company's net profit is expected to rise 71% on year for the June quarter to INR 1.67 billion, according to the average of estimates from six brokerages. Atul's net sales for the June quarter are expected to rise more than 27% on year to INR 16.59 billion, according to the average of estimates.

The profit estimates range from a low of INR 1.23 billion from Nuvama Wealth Management Ltd. to a high of INR 2.15 billion from Elara Securities (India) Pvt. Ltd. The highest net sales estimate is INR 18.2 billion from Kotak Securities Ltd. and the lowest is INR 14.96 billion from Nuvama.
 

The company is likely to post a 6% on-year growth in revenue for life science chemicals and 15% on-year revenue growth for the performance segment, Motilal Oswal estimated. The performance chemicals business, which supplies industrial chemicals to sectors such as paints, rubber, and textiles, is expected to remain the key growth driver during the quarter.

The higher raw material costs are expected to weigh on Atul's margins during the June quarter. Prices of crude-linked chemicals rose after supply disruptions caused by the war in West Asia. Brent crude prices fell to an average of $94.3 a barrel in June from $107.4 in May as tensions in the West Asia declined. However, brokerages expect higher raw material costs, which prevailed for most of the quarter, to put pressure on Atul's margins.

"We expect Atul to report 23% YoY growth in revenues, driven by price inflation following the Iran war and contributions from new growth projects," Kotak said. "However, we expect profit margins to come under pressure due to input cost inflation that may not have been fully passed along."

Atul's earnings before interest, tax, depreciation, and amortization for the June quarter are expected at INR 2.57 billion, according to the average of six estimates. The company's EBITDA will likely grow 14% on year but is expected to be down 4% on quarter as the March quarter EBITDA was boosted by a one-time reversal of provisions related to the new labour codes. The elevated input costs due to supply chain disruptions are likely to contract operating margins 10 bps-70 bps, PhilipCapital said.

Atul manufactures specialty chemicals and products used in pharmaceuticals, crop protection, fragrances and personal care. The company is the world's largest producer of para-cresol, para-anisic aldehyde and para-anisic alcohol at a single location, accounting for about 55% of global capacity. Para-cresol is clear liquid derived from cresol with a strong, sweet, floral anise or almond-like aroma. It is a major ingredient in perfumes, cosmetics, and food flavorings, and is also used as a base for sunscreen agents. It also manufactures caustic soda, hydrochloric acid, liquid chlorine, and liquid sulphur dioxide, and was the first company in India to manufacture Dapsone, a drug used to treat leprosy.

At 1101 IST, shares of Atul Ltd. traded at INR 6,057 a piece on the National Stock Exchange, down 0.5%. The stock is down nearly 13% since the company reported its results for the March quarter on May. 24.

Of the eight research reports on the company available with Informist, seven have a ‘buy' recommendation on the stock with an average target price of INR 7,915, which is 29% higher than the closing price Thursday. Only one brokerage has a 'hold' recommendation on the stock with a target price of INR 6,145.

Following are the Apr-Jun earnings estimates, in INR million, for Atul Ltd. from six brokerages, in descending order by the net profit estimate in INR billion:
 

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Edited by Akul Nishant Akhoury

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