Letter to the shareholders

Dear fellow shareholders,

2024-25 was a better fiscal for our Company (compared to 2023-24) although not the best. The numbers below are on consolidated results basis.

  • Sales: 5,583 cr, hitherto highest, up by 18% (17% volume)
  • EBITDA: 1,022 cr, hitherto highest, up by 47%
  • EBITDA margin: 18%, higher by three percentage points (earlier best 27%)
  • PBT: 692 cr, higher by 54% (earlier best 882 cr)
  • RoCE: 14%, higher by one percentage point (earlier best 34%)

The Board has recommended a dividend of 250% (2023-24: 200%) with a payout of 16% (2023-24: 15%). Meanwhile, team Atul is continuing its pursuit to surpass the previous bests.

Global nominal GDP of US$ 110.55 t grew at 3.3% in 2024 (same as 2023) despite the ongoing economic, political and social uncertainties.

  • India ranked fifth in GDP after USA, China, Germany and Japan
  • GDP of USA and China were US$ 29.2 t and US $ 18.8 t
  • GDP of Germany and Japan were US$ 4.7 t and US $ 4.1 t
  • GDP of India was US$ 3.9 t (soon expected to rank fourth)

GDP of India must grow at 7.8% to be a developed economy by 2047. Our Company will contribute in its own small way in this endeavour.

There are three big changes consistently and significantly reshaping the profile of chemical industry (as is true for many other industries).

  • Technology | Artificial intelligence (AI) and other technologies
  • Sustainability | E + ESG*
    * Economic + Environmental, Social and Governance
  • Tariffs | Protection to local manufacturers

These evolving trends reflect the need to align | transform to be in step with time. We are identifying and implementing relevant initiatives.

Global chemical industry grew at 3.9% in 2024, faster compared to 0.3% in 2023.

  • India ranked sixth (after China, USA, Germany, Japan and South Korea)
  • Size of chemical industry of China and USA was US$ 2.4 t and US$ 633 b
  • Chemical industry of Germany - size of which was US$ 236 b - grew by 2.5%
  • Chemical industry of Japan - size of which was US$ 158 b - de-grew by 1%
  • Size of chemical industry of India was US$ 220 b (thus there is a huge scope to grow)

Almost all manufactured products are enabled by chemistry. Our Company is well placed to tap into the emerging opportunities.

The newer entities under our Company - established with specific logic - are gradually improving their performance.

  • Atul Products (100% owned) increased sales from 65 cr to 353 cr. It decreased loss and expects to be PBT positive in 2025-26.
  • Sales of Anaven [50-50 joint venture (JV)], increased from 73 cr to 86 cr. It became EBITDA positive.
  • Atul Rajasthan Date Palms (74-26 JV) is still perfecting the technology. It expects to gradually better its performance.

Honourable Chief Minister of Gujarat, Shri Bhupendra Patel, unveiled Valsad Institute of Medical Sciences on February 3, 2025.

The established entities under our Company have increased sales although not always profit.

  • Atul Bioscience (100% owned) increased sales from 132 cr to 137 cr. It obtained USFDA for its Ambernath site.
  • DPD (98% owned) increased sales from £ 4.7 m to £ 5 m. It has the potential to increase sales by 50%.
  • RACL (50-50 JV) achieved its highest sales of 167 cr and PBT of 36 cr. It too has a good scope to raise its sales.
  • Amal (49.85% owned), on a consolidated basis, achieved its highest sales of 135 cr and PBT of 33 cr.

All the entities, subsidiary, JV and associate, are expected to steadily grow and boost the consolidated performance of our Company.

Our Company and its subsidiary, JV and associate entities are strengthening their financial position to remain resilient:

  • Our Company continues to remain debt-free. It had cash surplus of 691 cr (net of borrowings) as on March 31, 2025.
  • Atul Bioscience decreased its total debt from 55 cr to 45 cr. Its debt-equity ratio improved further, from 0.8 to 0.6.
  • DPD and Amal fully repaid their balance loans of 7 cr and 24 cr. Both the entities were cash surplus as on March 31, 2025.
  • RACL continues to remain debt-free. It was cash surplus as on March 31, 2025.
  • Atul Products (AP) and Anaven have debt of 151 cr and 127 cr. The debt of AP is under the state Government incentive scheme.

One of the key objectives is to increase capacity utilisation and realise further consolidated sales of 2,500 cr from the existing investment.

We continue to be guided by the five enduring and persistent mandates articulated through the years:

  • Achieve excellence in R&D, technology and manufacturing
  • Pervade technology (AI and other) across all functions
  • (Steadily) enhance people productivity; remain lean on fixed cost
  • Conserve cash (measure performance by free cash flow)
  • Work closely with customers to identify big ideas, but start small

We are identifying and implementing multifarious initiatives on an ongoing basis.

While one of the key objectives is to raise sales from the investment made, the other is to sow seeds for future growth through the following:

  • Debottlenecking and expanding existing products and product groups
  • Growing downstream and upstream products
  • Entering related products and product groups
  • Introducing retail products and formulations
  • Pursuing unrelated products, product groups and businesses (in a small way)
  • As of now, our Company is executing RoI projects of 243 cr and non-RoI projects of 206 cr (warehouse, other infrastructure, etc).

Atul Foundation received 15 cr from our Company, its subsidiary, JV and associate entities and 14 cr from the Government, corporates and individuals.

  • Commenced GMDC Atul Vidyalaya School in Kadipani, Chhotaudepur
  • Conducted 63 eye camps, covering 19,531 patients
  • Facilitated 28,308 people to access 20 schemes of the Government

We continue to nurture the spirit of social service as our Company grows its businesses. Please visit www.atulfoundation.org to know more.

Our Company has a work environment where people are valued and team members are professionally challenged to give their best. We are focusing on the following:

  • Developing team members (for higher and wider responsibilities)
  • Enhancing performance focus
  • Recruiting young talent and recruiting right
  • Strengthening leadership pipeline in higher management
  • Upgrading and digitalising HR processes

Our Company has people of diverse nationalities - American, Brazilian, Chinese, English, Nepalese and of course Indian - working cohesively and learning together.

There were changes in the Board to remain in sync with the mandate from the Companies Act 2013 and Securities and Exchange Board of India:

  • Mr Mukund Chitale, Ms Shubhalakshmi Panse and Mr Baldev Arora retired as Independent Directors (IDs) after completing 10 years each.
    On behalf of the Board and my colleagues, I thank Mr Chitale, Ms Panse and Mr Arora for their critical analysis, constructive approach and constant encouragement.
  • Ms Padmaja Chunduru, former Chairperson of Indian Bank and Managing Director and CEO of National Securities and Depository joined the Board as an ID.
    On behalf of the Board, I welcome Ms Chunduru. We are proposing to add two more IDs with commercial and techno-commercial insights.
  • Mr Vivek Gadre, President, Corporate Strategy, was appointed as a Whole-time Director to succeed Mr Bharathy Mohanan, Whole-time Director, who retires on May 25, 2025.

In order to maintain continuity and further strengthen the management, we are also planning to induct two more Executive Directors on the Board.

We have further enhanced this second integrated annual report and hope it will help you to understand how we are developing our Company.

  • ESG action reporting
  • Risk management reporting
  • Existing content restructuring

Our Company received ICAI award for Excellence in Financial Reporting 2023-24 (Manufacturing and Trading Sector).

We are grateful to all our stakeholders:

  • Customers - for pushing us to innovate and improve every day
  • Employees - for making our workplace diverse and dynamic
  • Society - for offering us an opportunity to serve
  • Shareholders - for supporting our efforts to create value

We are here to give back more than we take.

Our dreams are surging bigger and better - We will work relentlessly to build capability and enhance performance as we enter 2025-26 and beyond.

  • We will co-create our vision and strategy responsibly
  • We will prioritise long-term value as against short-term gains
  • We will balance financial and social returns

Our purpose and Values will guide us as we continue our path into the future, convinced that chemistry is vital and is connected with almost anything.

Sincerely,

Sunil Siddharth Lalbhai
Chairman and Managing Director

Valsad Insititute of Medical Sciences

There are three ways to solve a problem. First - the bad way - is when we think we solved the problem but actually we have only shifted it. Two - still the bad way - is when we think we solved the problem but actually we have deepened it. And three - the better way - is when we have not only solved the problem but also solved a class of problems. Our endeavour is to solve the problem the better way.