IN : Atul Ltd - Earnings disappointment looks imminent

We forecast EPS growth of 13.7% CAGR over FY21F-24F. We expect revenue growth to jump to 22% in FY22F and to 12% CAGR over FY21-24F. Rising raw material cost to hit gross margins in FY22F. We forecast gross margin to contract by 400bp in FY22F. We value the stock at 25x FY23F EPS, +1SD of long-term mean, to arrive at TP of Rs6,370. We initiate coverage on Atul with a Reduce rating.