UPL Q2 Results: Net Loss Widens Amid Pricing Pressure, Higher Finance Cost

UPL Ltd. reported a net loss in the second quarter of fiscal 2025.

The agro-chemical manufacturer posted a net loss of Rs 585 crore in the quarter-ended Sept. 30, 2024, according to an exchange filing on Monday. This compares with an estimated net profit of Rs 81 crore by analysts tracked by Bloomberg.

• Revenue up 9% at Rs 11,090 crore vs Rs 10,170 crore (Bloomberg estimate: Rs 10,522 crore).

• Ebitda flat at Rs 1,575 crore (Bloomberg estimate: Rs 1,599 crore).

• Ebitda margin at 14.2% vs 15.48% (Bloomberg estimate: 15.2%).

• Net loss of Rs 585 crore vs loss of Rs 293 crore (Bloomberg estimate was net profit of Rs 81 crore).

UPL's revenue rose in the second quarter, driven by 16% volume growth. Ebitda margin was 14.2%, affected by pricing pressure in crop protection. Net debt rose by $627 million. The company is optimistic for fiscal 2025, expecting better margins in the second half of the financial year.

SG&A costs rose by $16 million due to expected credit losses and write-offs, mainly in Latin America. The seeds business showed margin-accretive growth due to favourable pricing in grain sorghum and corn, with strategic investments expected to yield positive results in the second half.

Finance costs increased 23% to Rs 1,070 crore during the July-September period, compared to Rs 871 crore in the same period last year.

“Our volume growth continues, and we are on the path to achieving our Ebitda and net debt guidance levels. With our fundamentals intact, we saw robust volume growth in our global crop protection business. In India, there was an overall positive momentum. Pushing sales closer to application season has optimised our working capital requirements and minimised likelihood of sales returns. We will continue to focus on enforcing stricter credit and inventory norms to enhance cash flows," said Jai Shroff, Chairman and Group CEO.

Shares of UPL were trading 7.3% lower at Rs 516.9 apiece, as compared with a rise of 0.06% in the benchmark Nifty 50 at 3:15 p.m.