Agrochemical major UPL Ltd on Friday (February 2) reported a net loss of ₹1,217 crore for the third quarter that ended December 31, 2023. In the corresponding quarter last year, UPL posted a net profit of ₹1,087 crore, the company said in a regulatory filing. CNBC-TV18 poll had predicted a loss of ₹483 crore for the quarter under review.
The company's revenue from operations dipped 27.72% to ₹9,887 crore against ₹13,679 crore in the corresponding period of the preceding fiscal. CNBC-TV18 poll had predicted revenue of ₹9,837 crore for the quarter under review.
The Q3 revenue and EBITDA continued to be impacted by global channel destocking and ongoing pricing pressure in the post-patent space, exacerbated by higher rebates. Liquidation of high-cost inventory, and higher rebates to support channel partners also impacted contribution margin, the company said.
At the operating level, EBITDA declined 86.21% to ₹416 crore in the third quarter of this fiscal over ₹3,034 crore in the corresponding period in the previous fiscal. CNBC-TV18 poll had predicted an EBITDA of ₹1,057 crore for the quarter under review.
EBITDA margin stood at 4.21% in the reporting quarter versus 21.2% in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation. CNBC-TV18 poll had predicted a margin of 10.7% for the quarter under review.
Mike Frank, CEO of UPL Corporation, said, "Destocking continued to weigh down the global agrochemical market. Overall, prices remained stable QoQ in the crop protection business but came off significantly vis-à-vis the high base of the previous year amid intense post-patent price competition."
"Given this backdrop, our Q3 performance was significantly impacted by these headwinds in line with the rest of the industry, which is currently experiencing its worst downturn in decades. However, we did see a pick-up in volumes in Latin America. Our high margin differentiated and sustainable portfolio continued to outperform as the revenue share of this portfolio increased to 37% of crop protection revenue (ex-India) vs 28% last year."
The results came after the close of the market hours. Shares of UPL Ltd ended at ₹533.50, up by ₹3.60, or 0.68%, on the BSE.
