UPL Q2 Result: Net profit improves by 28% to Rs. 814 crore, but falls short of expectations

The combined net profit of Rs 814 crore fell just short of analyst projections.

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Manufacturer of crop protection goods UPL reported a consolidated net profit of Rs. 814 crore on November 1, a 28.4% year-over-year increase, just shy of analyst projections of Rs. 831 crore.

The net profit for the same quarter of the previous fiscal year was Rs 633 crore.

The shares on the National Stock Exchange dropped 2.14 percent shortly after the results. It was trading at Rs 714.60 per unit at 3:10 PM.

According to the company’s registration with the exchange, overall operating revenue increased 18% YoY to Rs 12,506 crore. Revenue was pegged at Rs 12,129.7 crore by analysts.

“We continued to see robust growth momentum in Q2 FY23. Our focus on quality growth with a better product mix and proactive pricing actions drove a strong 35 percent YoY growth in EBITDA, with EBITDA margins expanding by ~278 basis points,” Jai Shroff, CEO, UPL said.

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for the company for the second quarter of FY23 were Rs 2,768 crore, with an EBITDA margin of 22.1 percent, up from 19.4 percent in the same quarter last year.

“We are confident of meeting our FY23 guidance of revenue growth of 12-15 percent, EBITDA growth of 15-18 percent and reducing net debt by $650 million,” Shroff added.

The company’s gross debt increased from Rs 30,123 crore at the end of the June quarter to Rs 32,550 crore as of September 30. Additionally, net debt rose from Rs 26,480 crore in the June quarter to Rs 28,512 crore.

Every other region saw revenue increase of more than 20%, with the exception of Europe. Revenue in Latin America increased by 20% year over year to Rs 6,092 crore. Revenue from North America increased by 24% to Rs 1,185 crore. Revenue in India increased by 22% to Rs 1,808 crore.

To Rs 1,354 crore, income from Europe marginally increased by 1%.

The business released its quarterly earnings just a few days after announcing a significant reorganisation of its operations to free up value and bring in private equity partners in crucial industry sectors including Indian crop protection and international seeds.