UPL Q1 Results Review - Calls For H2 Revival Post Larger Loss: Nirmal Bang

Nirmal Bang Report

UPL Ltd.'s consolidated reported loss came in higher at Rs 3.8 billion versus our estimated loss of Rs 1.56 billion and street’s estimated loss of Rs 3.2 billion. This was due to higher staff cost/current tax. Q1 FY25 revenue at Rs 90.67 billion was up by 1.2% YoY (beat our estimate by a tad and street estimate by 3.4%). Ebitda came at Rs 11.0 billion was a miss of 6.7%/7.7% versus our/street estimates. This was due to staff cost being 14.7% above our estimate and the 90 bps miss in Ebitda margin (reported at 12.14%). This reversed the 115 bps beat in gross margin.

Positives: The share of high-margin Sustainable and Differentiated Products category in total CPC revenue was up from 27% in FY24 to 33% in Q1 FY25; it is expected to touch 40% by end-FY25E. Potential revival as per UPL’s call and FMC’s latest results offer a ray of hope. Pricing pressure has abated, barring in two molecules, according to UPL.

YoY performance: Revenue was up 1.2% and gross/Ebitda margin were down 600 bps/206 bps. Ebitda was down by 13.5% at Rs 11 billion. Consolidated adjusted earnings were down from a profit of Rs 2.09 billion to a loss of Rs 3.35 billion.

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