UPL Q4: Margins plunge 440 bps, Net profit falls 43 percent

UPL Ltd., a pesticides and agrochemicals company declared its fourth quarter earnings on Monday. Revenues at Rs 16,569 crore are higher by 4.5 percent year on year, but 3 percent lower than the CNBC-TV18 poll. The revenue impact is owing to a fall in product prices and delay in the planting season.

Earnings before interest, tax, depreciation and ammortisation at Rs 3,015 crore is 16 percent lower year on year and also 21 percent lower than the CNBC-TV18 poll. Operating margins have plunged 440 bps year on year to 18.2 percent, while estimates were at 22.4 percent. Margins were impacted by headwinds in the post-patent space. Furthermore, UPL's net profit plunged 43 percent to Rs 792 crore, much lower than the estimated Rs 1,858 crore.

Mike Frank, CEO – UPL Global Crop Protection, said "The fourth quarter was an unusual one with pricing pressure and delayed purchases by channel in the post-patent space due to oversupply of certain molecules. Our focus in the last quarter was to grow share in key markets, liquidating most of our high cost inventory, closely manage working capital and smartly set-up our inventory position for the next year."