India's UPL reports lower-than-expected profit on weak demand

UPL

31/07/2023 11:16

BENGALURU, July 31 (Reuters) - Indian agriculture chemicals producer UPL
Ltd  UPLL.NS  reported a lower-than-expected quarterly profit on Monday due to
weak demand and price competition from some Chinese exporters.
    The domestic agrochemicals market has been fighting off demand related
challenges owing to the projected El Nino weather pattern, high-cost stocks and
the entry of Chinese generic varieties available at lower prices.
    UPL's consolidated net profit fell to 1.66 billion rupees ($20.18 million)
in the first quarter from 8.77 billion rupees a year earlier, missing analysts'
average estimate of a profit of 4.51 billion rupees, according to Refinitiv IBES
data.
    Revenue from operations fell 17.2% to 89.63 billion rupees.
    The company said it took in a one-time expense of 430 million rupees partly
related to losses due to fire, restructuring in Europe, litigation and severance
related expenses.
    "The global agrochemical industry has been going through a challenging phase
over the last two quarters as distributors prioritised destocking and focused on
tactical purchases amid high channel inventories," said Mike Frank, chief
executive in a statement.
    UPL Group's earnings before interest, taxes, depreciation, and amortization
(EBITDA) margins also fell to 17.8% from 21.6% a year earlier.
    The company in a statement said that channel demand will continue to remain
weak in the second quarter, with recovery expected in the second half of the
year.
    UPL's shares have lost were 4.2% in the quarter ended June 30, while the
benchmark Nifty 50 index  .NSEI  has gained 10.5%.

    


($1 = 82.2490 Indian rupees)

 (Reporting by Navamya Ganesh Acharya in Bengaluru; Editing by Nivedita
Bhattacharjee)
 ((Navamya.GaneshAcharya@thomsonreuters.com; +91 8805175330 ;))