India's UPL posts wider-than-expected Q1 loss on lower product prices
Indian agrochemicals maker UPL 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
KEY CONTEXTIndia'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 19.52 7.58 7.53 NULL Buy 23 0.95 1.75
Rallis India 34.14 16.47 11.48 24.17 Sell 14 1.28 0.76
Ltd
PI Industries 38.72 26.11 15.52 4.54 Buy 24 1.05 0.34
Ltd
Dhanuka 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
