UPL share price tumbles 6% after Q4 earnings; should you buy, sell, or hold? Here's what brokerages say

livemint.com:

UPL, a leading provider of agricultural solutions and services, slumped 6% in today's intraday trade, reaching ₹501.65 apiece. This downturn came after the stock saw a strong surge in the last two trading sessions, driven by the anticipation of favorable financial results from the company. In the fourth quarter of FY24, the company recorded revenue of ₹140.8 billion, marking a 15% year-on-year decline.

This figure was notably higher than the estimated ₹114.7 billion by domestic brokerage firm Motilal Oswal. Also Read: Varun Beverages share price jumps over 5% buoyed by Q1 result; should you buy? The drop was attributed to lower agrochemical prices (down 15% YoY) and a volume decline of 2% YoY. The EBITDA stood at ₹19.3 billion, significantly higher than the estimated ₹13.2 billion, representing a 36% year-on-year decrease.

The EBITDA margin also experienced a decline, dropping by 450 basis points year-on-year to 13.7%; however, this surpassed the estimated 11.5%. This decline was primarily attributed to a decrease in gross margins, which fell by 470 basis points year-on-year. The contribution margin was impacted by the liquidation of high-cost inventory and increased rebates provided to support channel partners.

The adjusted profit after tax (PAT) stood at ₹3.6 billion, contrasting with the estimated loss of ₹4 billion and marking a 65% year-on-year decrease. Also Read: Does rising India VIX mean rising tide against BJP's win in Lok Sabha Election? On the guidance front, the company expects normalisation of the crop protection business in 2HFY25 and strong performance of the seeds business in FY25. The management has guided for 4–8% revenue growth in FY25, with absolute EBITDA growth of over 50% and CFO generation of USD