UPL Q1 Results: Net profit drops 81% YoY to ₹166 crore; cuts FY24 guidance sharply
UPL Ltd on Monday reported a net profit of ₹166 crore in the quarter ended June 2023, registering a sharp fall of 81% from ₹877 crore in the year-ago quarter. The company’s revenue from operations in Q1FY24 plunged 32% to ₹8,963 crore from ₹10,821 crore, YoY. Earnings before interest, taxes, depreciation and amortization (EBITDA) during the quarter under review decreased 16.7% to ₹1,952 crore from ₹2,343 crore, while EBITDA margin contracted by 380 basis points (bps) to 17.8% from 21.6%, YoY.
The company said its revenue and EBITDA for Q1 was impacted by the industry-wide slow down. The global agrochemical industry has been going through a challenging phase over the last two quarters as distributors prioritized destocking and focused on tactical purchases amid high channel inventories. Additionally, the market is witnessing pricing pressure given the high base of previous year and aggressive price competition we have seen from the Chinese post patent exporters.
“Given this backdrop, our revenue and profitability were also impacted by these headwinds in line with the rest of the industry," said Mike Frank, CEO, UPL Corporation Ltd. Also Read: Adani Green Energy Q1 Results: Net profit jumps 51% to ₹323 crore; revenue rises 33% YoY UPL sharply slashed its earnings guidance for FY24. The agrochemicals major now projects revenue growth of 1-5% in FY24 as compared to 6-10% earlier.
It cut its EBITDA growth guidance for the year to 3-7% from 8-12%. “Going forward, while we anticipate demand to remain subdued in Q2 FY24 as well, our performance should be sequentially better. We are optimistic of demand recovery in H2 FY24 as the channel inventory approaches a new normalized level.
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