A leading brokerage has reaffirmed its Buy rating on Atul Ltd with a target price of ₹8,500 following an extensive visit to the company's integrated manufacturing complex in Atul, Gujarat. The assessment comes after meetings with key management personnel, including Vivek Gadre, President (Corporate Strategy) and Whole-time Director.

Manufacturing Infrastructure and Capabilities

Atul's integrated complex represents a significant industrial asset spanning over 1,350 acres, originally purchased in 1947. The facility demonstrates the company's manufacturing prowess through its diverse production capabilities.

The complex operates across four distinct zones, each dedicated to specific divisions. Notably, products under the aromatics division, such as p-Cresol, are manufactured at separate locations. The facility maintains robust environmental compliance through its own Effluent Treatment Plant (ETP) and a separate central ETP system.

Operational Performance and Market Dynamics

The liquid epoxy resin (LER) plant currently operates at 75-80% utilization on debottlenecked capacity. Domestic demand remains strong, particularly from windmill applications, though US exports face challenges due to tariff impacts.

The company benefits from abundant Epichlorohydrin (ECH) availability, with new capacities coming online in South-east Asia. Additionally, Atul maintains captive power plants that cater to the overall energy requirements of the integrated complex, including the caustic soda plant operations.

Competitive Positioning and Innovation

Atul holds a competitive advantage in 2,4-D exports to the US market, demonstrating its strong market position in specialty chemicals. The company's commitment to innovation is evident through its substantial R&D infrastructure.

Revised Financial Outlook

The brokerage has made modest adjustments to its financial projections, trimming FY27E EPS estimates by approximately 5%. This revision accounts for near-term EBITDA margin pressure resulting from weaker export volumes to the US market. The analysis now rolls over to December 2027E EPS for valuation purposes.

Despite these near-term challenges, the brokerage maintains its Buy recommendation with a target price of ₹8,500, reflecting confidence in Atul's long-term prospects and competitive positioning in the specialty chemicals sector.

Atul Limited has disclosed receiving a substantial GST demand and penalty order from tax authorities, marking a significant regulatory development for the chemical company. The order was issued by the Joint Commissioner GST & Central Excise, Surat, and received by the company on December 31, 2025.

GST Demand and Penalty Details

The tax authorities have imposed significant financial obligations on Atul Limited through their recent order. The demand covers multiple financial years and relates to specific tax credit practices.

Nature of Alleged Violations

The order under Section 74 of the GST Act alleges incorrect availment of input tax credit by Atul Limited. The authorities claim the company improperly availed input tax credit against goods and services used for construction and building related work during the specified period from FY 2018-19 to 2022-23.

The Joint Commissioner GST & Central Excise, Surat issued the order, which was made available through the authority's portal. The company received access to the complete order on December 31, 2025, at 6:06 pm.

Company's Response and Impact Assessment

Atul Limited has assessed the potential impact of this GST order on its operations and financial position. The company has stated that there is no material impact on the financials, operations, or other activities due to this order.

Key aspects of the company's position include:

• The order is appealable under GST regulations
• No immediate material impact on company operations
• Company plans to pursue available legal remedies

Regulatory Compliance and Disclosure

The disclosure was made pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Company Secretary and Chief Compliance Officer Lalit Patni signed the regulatory filing, ensuring compliance with stock exchange notification requirements.

The company has informed both BSE Limited and National Stock Exchange of India Limited about this development through their respective listing portals, maintaining transparency with investors and regulatory authorities regarding this significant tax matter.