UPL Ltd. share price target

*over or under performance to benchmark index UPL Ltd is a global agriculture solutions company engaged in the agrochemicals and industrial chemicals business, with manufacturing sites globally. Through...

The quarter’s revenue reached Rs. 11,090 crore, marking a 9% increase y-o-y and a 22% q-o-q rise.

UPLL reported a weak quarter as revenue grew marginally (1% YoY), led by strong volume growth (up 16%) offset by lower agrochemical prices.

UPLL reported a weak quarter as revenue declined 15% YoY, primarily due to
lower agrochemical prices (down 15% YoY) and volume decline of 2% YoY.
EBITDA margins contracted 450bp YoY largely due to higher rebates (~5%
price impact) and liquidation of high-cost inventory, partly offset by an
improved product mix and a lower cost of goods sold.

UPL reported a weak Q2FY24 primarily on channel destocking and higher pricing pressure. All segments reported revenue decline YoY. However, differentiated and sustainable product portfolio posted volume growth of 11% YoY. Also, the seed business recorded 10% revenue growth YoY.

While UPL has reported weaker-than-expected Q1FY24, we note (1) farmer offtake has remained intact and it will eventually result in revival in volume growth in H2FY24, (2) Seeds segment continues to report strong performance with volume growth of 14% YoY, indicating healthy farming activity and (3) India crop protection business suffered due to shift in agri season and delay in monsoon; we believe it is likely to recover in Q2FY24.