India's UPL posts wider-than-expected Q1 loss on lower product prices

UPL

02/08/2024 11:06

BENGALURU, Aug 2 (Reuters) - Indian agrochemicals maker UPL  UPLL.NS  reported a
bigger-than-expected quarterly loss on Friday as rising costs and pricing pressure hurt
margins. 
    The company reported a consolidated net loss of 3.84 billion rupees ($45.9 million) for
the three months ended June 30 from a profit of 1.66 billion rupees a year earlier. Analysts,
on average, were expecting a 3.48 billion rupees loss, as per LSEG data.
    Revenue from operations rose 1.2% to 90.67 billion rupees, while total expenses increased
5.7% to 95.39 billion rupees mainly on higher materials costs. Meanwhile, product prices fell
14%.    
    For further results highlights, click  urn:newsml:reuters.com:*:nFWN3JP23C

    
KEY CONTEXT
India's agrochemical companies have been grappling with lacklustre growth in the last few
quarters, largely due to the destocking of inventory - the process of emptying excess
inventory levels following low demand. Expenses also spiked on higher freight rates and
container shortages following disruptions in the Red Sea.
    However, domestic demand is expected to pick up on prospects of above-average monsoon
rains this year and a bumper harvest.    
    
PEER COMPARISON
  
                           Valuation (next  Estimates (next  Analysts' sentiment         
                             12 months)       12 months)                                 
                RIC        PE      EV/EBIT  Revenue  Profit  Mean    No of     Stock to  Div
                                   DA       growth   growth  rating  analysts  price     yield
                                            (%)      (%)     *                 target**  (%)
 UPL Ltd         UPLL.NS    19.52     7.58   7.53     NULL   Buy           23    0.95     1.75
 Rallis India    RALL.NS    34.14    16.47   11.48   24.17   Sell          14    1.28     0.76
 Ltd                                                                                     
 PI Industries   PIIL.NS    38.72    26.11   15.52    4.54   Buy           24    1.05     0.34
 Ltd                                                                                     
 Dhanuka         DHNP.NS    26.62    18.98   17.17   18.36   Buy           10    1.23     0.81
 Agritech Ltd                                                                            
    
 
* Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong
Sell

** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the
stock is trading above the PT


APRIL-JUNE STOCK PERFORMANCE   

    
        
-- All data from LSEG IBES

-- $1 = 83.7230 Indian rupees


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UPL June Qtr 2024 vs Peers    https://tmsnrt.rs/4cbmfLF
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 (Reporting by Ashish Chandra in Bengaluru; Editing by Eileen Soreng)
 ((ashish.chandra@thomsonreuters.com; +91 7982114624;))