Investment rationale of Atul Ltd: Some jottings
Factors that attract towards Atul:
- 1200 acre land bank on Mumbai-Ahmedabad highway,
- 100 cr investment in Wyeth,
- 60 years operational history and proven track record,
- Trustworthy promoters with sale 50% holding. promoter
- Integrated operations with captive power plant, infrastructure and water resources.
- On MCap of 450Cr the company is generating sales of 1500Cr and net profit of 90Cr
- Continued and rising dividend since 2001.
Concerns:
- Debt of over 300Cr is worrisome. But most of it is working capital loan.
- Rising raw material prices. Weakening dollar will further take a toll on cost front.
- Weak market sentiments.
Outlook: Despite concerns over short term the stock could return decent return over coming 2-3 years.