UPL Q1 Results preview: Revenue and profit to decline amid steep price correction, high finance costs

As per CNBC-TV18 poll, the firm’s profit after tax (PAT) will fall significantly by 72 percent to Rs 262 crore as against Rs 955 crore in the first quarter of the previous financial year.

The earnings before interest, taxes, depreciation, and amortisation (EBITDA) is expected to slip 33 percent on a year-on-year basis to Rs 1,561 crore versus Rs 2,343 crore earlier. It may be noted that the EBITDA will be calculated after forex adjustment.

The operating profit margin (OPM), meanwhile, is likely to decline to 15.9 percent as against 21.6 percent in the corresponding quarter last fiscal, according to poll predictions.

Apart from price corrections, analysts say the weakness during the quarter will also be on the back of finance costs that are expected to remain elevated due to higher interest costs.

Meanwhile, UPL’s seeds business (Advanta) may continue to grow strongly, they said.

In the previous quarter too, UPL’s revenue was impacted owing to a fall in product prices and delay in the planting season while margins were impacted by headwinds in the post-patent space

In a post fourth quarter earnings conversation with CNBC-TV18, Mike Frank, CEO – UPL Global Crop Protection, had said "Fourth quarter was an unusual quarter for us". He added that the company ensured that high cost inventory was liquidated and that it competed for shelf space aggressively. The company's revenue guidance for financial year 2023-24 is 6 to 10 percent, while EBITDA guidance is 8 to 12 percent.

Frank had also said the company was comfortable at existing levels of debt and clarified that there were no discussions regarding promoter exit from businesses.