IGI Logo

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