Using Atom Beautify (Click Packages==>Atom Beautify==>Beautify) did nothing at first. I needed to make a tweaks.
Navigate: File==>Settings==>click Packages==>click settings under atom-beautify
Under Default Beautifier, select Pretty Diff
For convenience, put checkmark by selecting Beautify On Save
Click x to close the setting window.
Now your html file gets indented properly upon a Save.