UPL Q1 concall highlights ( also explains the stress in agrochemical sector ) –
UPL’s Q1 numbers were bad due to price and volume contraction
Price correction due oversupply in generic products from China. In non-generic products / seeds, pricing is holding up
Volume contraction continues. Started last Qtr. Should end by end of Q2
Correction-due over stocking that happened during COVID and Russia- Ukraine disruptions
Gross Debt lower by aprox 1250 cr YoY but is up QoQ as Q1,Q2 usually have inventory build up at company level. Same gets liquidated in Q4
Guiding for strong double digit growth in H2 FY24
Jump in Finance cost due consolidated rate of borrowing going up from 3.5 to 6 pc YoY
Debt/EBITDA to remain below 1.5-2 for FY 24
Company still performing better than most other formulations based agrochemical players
To cut costs by 800 cr in next 2 yrs, 400 cr this yr
Expect some recovery in Q2. Full recovery by Q3,Q4
Farmer level consumption is not affected at all
EBITDA in Q1 is down by 32 pc. Still guiding for 3-7 pc EBITDA growth for FY 24. Management believes that they have factored in all types of scenarios to arrive at this guidance
H2:H1 – revenue breakup is generally 60:40. If company grows in H2, it can achieve a lot of catch up
Volumes to catch up from Q3 onwards. Pricing to normalise only in Q4
Disc: holding
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