Agrochem major UPL registered a 29 per cent growth in consolidated net profits for the April-June quarter on better product realisations, higher sales volumes and favourable exchange rate.
UPL reported a net profit of ₹877 crore on revenues of ₹10,821 crore during the June quarter as compared to a net of ₹678 crore on revenues of ₹8,515 crore.
Buoyed by the June quarter performance and better demand outlook, UPL has revised upwards its revenue and EBIDTA guidance for the full fiscal.
Product realisations were up 18 per cent during the quarter, while the company saw a six per cent increase in volume growth. The UPL scrip gained about 3.95 per cent to close at ₹769.50 on the BSE.
“After a strong end to FY2022, we continued to see solid growth momentum in Q1 FY23, as the strong agri commodity prices drove significant uptick in price realizations as well as healthy demand from growers. The EBITDA margin remained largely intact despite the significant input cost inflation and a challenging macro-economic environment exacerbated by geopolitical issues. This was driven by proactive pricing actions coupled with efficient supply chain management that led to the strong topline growth getting translated into robust operating profitability growth as well,” said Jai Shroff, CEO, UPL Ltd.
“Moving on, as we look ahead to the rest of the year, we are well poised to continue our healthy growth momentum, as product realizations continue to remain strong, recent new launches continue to see good traction in the marketplace, and the overall demand outlook continues to be constructive. Considering this positive outlook, we have revised our FY23 guidance upwards, expecting to achieve a revenue growth of 12-15 per cent now versus 10 per cent earlier, and EBITDA growth of 15-18 per cent versus 12-15 per cent earlier,” Shroff added.
Anand Vora, Global CFO, UPL said the company had a favourable exchange rate impact of three per cent on revenues during the quarter.
UPL’s India business grew at a sluggish pace of 8 per cent during the June quarter, while North America clocked the highest growth rate of 47 per cent. Mike Frank, President and COO, UPL attributed a slower growth rate in India to the delayed start to the kharif planting season.
“The monsoon has started and we are witnessing strong movement of products going into the field. We are anticipating a strong growth in the first half in the Indian business,” Frank said.
As a part of its collaboration with MMAG, a subsidiary of Mitsui Chemicals Agro, UPL has recently launched a new insecticides range in the country containing the patented molecule ‘Flupyrimin’ to target the most damaging rice pests.
Besides, it also launched Gigaton Carbon Goal in Europe, a global ecosystem that will harness sustainable agricultural practices to reduce atmospheric carbon dioxide by one billion metric tonnes by 2040.