UPL Q2 Results: Stock falls as much as 8% after net loss widens from last year

UPL Ltd. shares fell as much as 8% on Monday, November 11, after the company reported a net loss that was wider compared to the same period last year.

The company reported a net loss of ₹443 crore for the September quarter, compared to a net loss of ₹189 crore that it had reported during the same quarter last year.

Revenue for the quarter increased by 9% to ₹11,090 crore, compared to ₹10,170 crore during the same period last year. Revenue growth for the quarter was driven by a 16% year-on-year increase in volumes, a 7% decline in prices and near-flat forex rates.

Led by this volume growth, the company said that it is on track to achieve its net debt and EBITDA guidance for the current financial year.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) remained unchanged from the year-ago period at ₹1,576 crore, while EBITDA margin narrowed to 14.2% from 15.5% last year.

Contribution Margin for the quarter fell to 37.7% from 39.9% last year. UPL attributed the margin impact to overall pricing pressure in the crop protection segment.

UPL's seeds business saw margin accretive growth this quarter, which was driven by favourable pricing in grain sorghum and corn. "The strategic investments we have made are expected to yield favourable results in the second half of the year," the company said in a post-earnings statement.

Among UPL's Geographies:

The Latin America business grew by 1% during the quarter, where a strong volume growth in Brazil was offset by softer prices.
North America grew by 16% year-on-year, led by strong in-season demand.
European business grew by 18% from last year backed by strong volume growth in fungicides and a near-25% growth seen in the Natural Plant Protection business.
Rest of the World business declined by 2% from the year-ago period, where a volume growth in Africa was offset by a decline in the APAC region.

Shares UPL are currently trading 7.4% lower at ₹516.4. The stock is down 13% so far in 2024.