Atul Ltd, a leading chemicals company, faced a challenging first quarter in FY24, with its net profit declining by 37.6% to Rs 102.05 crore. The company’s financial performance was hampered by sluggish global demand, a weak product mix, and negative operating leverage during the April-June quarter.
On July 21, Atul Ltd reported a net profit of Rs 102.05 crore for the first quarter of the current fiscal year, marking a significant decrease from the Rs 163.47 crore profit achieved in the same quarter last year.
Additionally, the company’s revenue also witnessed a notable decline, falling by 20% year-on-year to Rs 1,182.02 crore. This was a significant drop from the revenue of Rs 1,476.85 crore recorded in the corresponding period of the previous year.
The primary drivers of this decline in revenue were weaknesses in demand across key segments such as polymers, aromatics, and colors. Moreover, Atul Ltd faced the challenge of double-digit price erosion across various segments, further impacting its topline performance.
The combination of reduced demand and price erosion adversely affected the company’s financials, reflecting the broader challenges faced by the chemicals sector during this period. Atul Ltd’s management is likely to strategize and implement measures to address these issues and strengthen the company’s financial position in the coming quarters.
As the global economic landscape continues to evolve, Atul Ltd and other companies in the sector may have to navigate uncertainties and adjust their business strategies accordingly. Stakeholders will closely monitor the company’s initiatives to sustain and improve profitability in the face of challenging market conditions.
