Tag: UPL

UPL Q4 Results: FY25 revenue growth seen between 4% to 8%; Management sees further debt reduction

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

UPL Ltd., a pesticides and agrochemicals company, on Monday reported a consolidated net profit of ₹40 crore for the January-March period as against CNBC-TV18’s poll of ₹356 crore loss. The company reported a one-time gain of ₹105 crore.

Revenues stood at ₹14,078 crore, higher by 20% year-on-year than the CNBC-TV18 poll of ₹11,720 crore.

Its revenue from operations for the full year stood at ₹43,098 crore, down 20% YoY. For the financial year 2025, the management expects a revenue growth between 4% and 8%.

EBITDA or earnings before interest, tax, depreciation and ammortisation came in at ₹1,932 crore, 59% higher year-on-year than the CNBC-TV18 poll of ₹1,213 crore. Operating margins have expanded 340 basis points year on year to 13.7%, while estimates were at 10.3%.

For the financial year 2025, the company expects EBITDA to grow by more than 50%.

The contribution margins are primarily impacted by the liquidation of high-cost inventory and higher rebates to support the channel, the company said.

The company in a filing also said that $300-400 million operational cash generation will be used for debt reduction.

The Board has recommended a dividend of ₹1 per equity share on the face value of ₹2 each. This will results in a payout of 50%, the company said in a regulatory filing.

The dividend will be subject to the approval of members at the ensuing Annual General Meeting. The dividend will be paid within 30 days of the Annual General Meeting.

“As compared to Q3, volumes recovered well and were in-line with LY, largely led by the strong performance of our high-margin differentiated and sustainable portfolio, which contributed 36% of crop protection revenue vs 29% LY. Our recent launches of Evolution, Feroce and Shenzi did exceedingly well, growing volumes by >50%,” said Mike Frank, CEO, UPL Corporation Ltd.

“As we look ahead to FY25, we expect a return to growth and normalization in margins driven by the agchem market returning to normality. Further, our foremost priority remains to deleverage our balance sheet which we plan to achieve through operational cash flows, completion of rights issue, and pursuing capital raise opportunities within our platforms,” Frank said.

Shares of UPL Ltd. were trading with gains of nearly 7% at ₹535 apiece on the NSE.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

UPL likely to launch Advanta IPO in FY25, may divest 10-12% stake: Exclusive

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Global agrochemical manufacturer and distributor UPL Ltd., is likely to launch an Initial Public Offer (IPO) of its seeds business, Advanta Enterprises in financial year 2025, sources privy to the matter told CNBC-TV18.

Sources said that UPL, the most recent exit from the Nifty 50 index, is likely to divest nearly 10% to 12% stake in Advanta through the IPO.

Sources also said that UPL is likely to use the proceeds of the Advanta IPO in deleveraging. The company had also planned a rights issue worth over ₹4,000 crore and in an exchange filing on March 26, it mentioned that it is in the process of completing the necessary formalities and compliances for the same.

UPL is likely to target a valuation of $4 billion for Advanta through its IPO and has appointed BoFA Securities, Morgan Stanley and JM Financial as bankers for the issue.

The company offered ‘no comment’ in response to CNBC-TV18’s story.

UPL currently owns 86.7% stake in Advanta, while the remaining stake is owned by Private Equity firm KKR. KKR had acquired 13.3% stake in Advanta for $300 million in September 2023.

For financial year 2023, Advanta had reported revenue of ₹3,558 crore and Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of ₹921 crore. For the first nine months of the current financial year, Advanta’s revenue stood at ₹3,558 crore.

UPL’s debt burden has been a key trigger for the stock. As of December 2023, the company had a net debt of $3.77 billion and has targeted reducing its net debt by $2.5 billion by March 2024.

Shares of UPL are trading 1.7% higher at ₹485. The stock is down 34% over the last 12 months.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Stocks to Watch: Mahindra & Mahindra, NLC India, Asian Paints, UPL, Prestige Estates and more

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

NSE rejig: Shriram Finance to replace UPL in Nifty50 from March 28

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Non-banking financial company (NBFC) Shriram Finance will replace UPL Ltd in the broader Nifty50 from March 28, the National Stock Exchange (NSE) said on Wednesday, announcing a rejig of its key indices.

“The Index Maintenance Sub-Committee (Equity) of NSE Indices Limited has decided to make the replacement of stocks in various indices as part of its periodic review as listed hereunder. These changes shall become effective from March 28, 2024 (close of March 27, 2024),” the NSE said.

According to the exchange, UPL has been removed from Nifty50 under its exclusion from the Nifty 100 index (a parent index for Nifty 50). Also, Shriram Finance has been included in the Nifty 50 index as it has the highest 6-month average free-float market capitalisation within the eligible universe as a replacement for UPL.

For Nifty Next 50, Adani Wilmar Ltd and Muthoot Finance Ltd, PI Industries Ltd, Procter & Gamble Hygiene & Health Care Ltd and Shriram Finance Ltd were excluded.

Adani Power Ltd, Indian Railway Finance Corporation Ltd, Jio Financial Services Ltd, Power Finance Corporation Ltd and REC Ltd were included in the Nifty Next 50.

Also Watch | Sriram Velayudhan, VP of Alternative Research at IIFL Securities, delve into the index modifications during his interview with CNBC-TV18.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

UPL shares fall to a three-year low post third quarter loss, here’s what the street has to say

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

UPL Ltd. shares are the top losers on the Nifty 50 index after the company reported a wider-than-expected loss in the December quarter. The stock, after its 7.5% drop is the top loser on the Nifty 50 index.

The stock has seen multiple downgrades post the earnings and management commentary, which expects business to return to normalcy in the second quarter of the financial year 2025 compared to the current financial year.

Brokerage firm Jefferies has maintained its “buy” recommendation on UPL but cut its price target to ₹635 from ₹675 earlier. Even the revised price target implies a potential upside of 20% from Friday’s close.

Along with its price target, Jefferies has also cut UPL’s earnings per share (EPS) estimates for the financial year 2025 and 2026 by 13% and 15% respectively, while also anticipating a loss in the financial year 2024.

However, it believes that the company’s deleveraging targets are healthy as it explores capital-raising plans, including a rights issue.

DAM Capital though, has downgraded UPL to “sell” with a price target of ₹462, saying that UPL’s realisations continue to remain under significant pressure. This, combined with high-cost inventory liquidation with higher rebate levels led to significant negative value growth and gross margin compression.

Brokerage firm Nuvama has also downgraded the stock to reduce and cut its price target to ₹486 from the earlier target of ₹718. It sees the risk of credit rating downgrades and pressure on UPL’s balance sheet going forward. It has also cut UPL’s target multiple to 11 times from 13 times earlier.

On the flip side, InCred advises investors to buy UPL aggressively on dips, and has upgraded the stock to “add” with a price target of ₹694. It said that agrochemical majors are being hit hard by channel inventory and that UPL is doing the right thing by not increasing its receivables and saving its vendors.

It is valuing UPL at 20 times the financial year 2026 price-to-earnings but said that the stock remains volatile at the cusp of a cycle change.

Out of the 32 analysts that track UPL, five of them so far have a “sell” or an equivalent rating on the stock, while 21 continue to maintain a “buy” recommendation.

Shares of UPL are down 8.1% to ₹490.7. The stock is trading at the lowest levels in nearly three years.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

UPL Q3 Results: Agrochemical major posts ₹1,217-crore loss, misses all estimates

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

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.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Shriram Finance may be the newest Nifty 50 entrant — Here are the potential inflows

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Shriram Finance, which has gained more than 12% since the beginning of this year, is poised for potential inclusion in the country’s closely monitored benchmark index, Nifty 50, likely replacing UPL. The official list for the Nifty 50 rejig will be announced in late February this year.

The non-banking financial company (NBFC) could witness an inflow of up to $245 million from the passive funds if included in India’s biggest index. This change could also bring $107 million outflow from UPL, according to Nuvama Alternative and Quantitative Research.

Domestic and global passive funds, such as exchange-traded funds (ETFs), structure their portfolios based on these indices.

The UPL stock has given flat returns since it joined Nifty in September 2017. It closed 1.48% higher at ₹552.25 apiece on Saturday.

Meanwhile, the potential candidates to enter Nifty Next 50 include the recently listed Jio Financial Services and Adani Power from the Adani Group stable. While Jio Financial’s entry is expected to lead to inflows of $77 million, that of Adani Power will trigger inflows of $47 million, as per calculations by Nuvama.

State-owned IRFC, REC, PFC, Polycab India and Union Bank of India will also enter the index. The entry of these four stocks may lead to cumulative inflows of $170 million.

Shriram Finance, Adani Wilmar, Muthoot Finance, PI Industries, Procter & Gamble Hygiene, Colgate Palmolive, and Info Edge are the stocks that are likely to exit the Nifty Next 50 index.

Additionally, the domestic brokerage said that Canara Bank will join Nifty Bank, displacing Bandhan Bank. Canara Bank’s entry will likely result in inflows of approximately $36 million, whereas Bandhan Bank’s exit may trigger outflows of around $39 million.

The brokerage firm does not expect any changes in the Nifty IT index in the upcoming review.

The market capitalisation cut-off date to determine the eligibility of stocks that will stay or exit the indices is January 31 and the exchange is expected to announce the results in the second half of February, which will come into effect from March 31.

Note: The stock market is engaged in a complete session on Saturday, January 20, and will be closed on Monday, January 22, due to a public holiday in Maharashtra state to mark the inauguration of the Ram Temple in Ayodhya city.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

UPL’s latest acquisition to strengthen its fungicide portfolio

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Global agrochemical major UPL Ltd. has announced the planned acquisition of Corteva Agriscience’s solo mancozeb global fungicide business outside of China, Japan, South Korea and EU member countries.

Mancozeb is said to be a protective fungicide, used to prevent plant diseases across a range of crops.

The acquisition will give UPL ownership of “Dithane,” the original global mancozeb brand, along with access to Rainshield technology, which enables crop protection in wet weather conditions, a statement from UPL said.

However, the company has not disclosed the cost of the acquisition.

The acquisition is only limited to Corteva’s solo formulations of Mancozeb, with Corteva retaining the ownership of its premix formulations. Subject to customery approvals, the transaction is likely to conclude in the first quarter of financial year 2025.

UPL further said that Mancozeb is an important tool to manage fungicide resistance.

“This acquisition is a meaningful milestone for UPL and for farmers, it strengthens our portfolio of solutions and leadership in the multisite fungicide market,” Christina Coen, Chief Marketing Officer of UPL said.

Shares of UPL are trading 0.3% lower at ₹559.45. The stock has been an underperformer through 2023, becoming one of the only two Nifty 50 constituents that delivered negative returns during the calendar year.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Aarti Industries and their disappointments with long-term contracts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Specialty chemicals manufacturer Aarti Industries Ltd. announced last week that it has entered into a long-term contract with a global agrochemicals player for the supply of a niche agrochemical intermediate.

The nine-year, long-term supply contract has a revenue potential of ₹3,000 crore and supplies will begin from this fiscal year itself.

Industry sources suggest that the contract was to UPL, the Indian listed agrochemical major and for the supply of herbicide S-Metolachlor.

Based on the margins earned so far and an annual revenue potential of ₹333 crore, the estimated addition to Aarti Industries’ Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) would be close to ₹73 crore.

But there is a roadblock in store. The European Union has decided to not renew the approval for S-Metolachlor, which will lead to diversion of volumes from the EU to other markets.

According to brokerage firm Equirus Securities, this may put pressure on prices and volume offtake of the advanced intermediate that Aarti Industries is supposed to manufacture.

The brokerage note also said that the long-term contract for the supply of the said intermediate is also at risk due to this. The other company that could be impacted by this is UPL, which has capacities in place to produce the said product.

This isn’t the first instance of long-term contracts being an issue for Aarti Industries, despite it being among the first companies to enter into long-term contracts. The company entered into three long-term contracts between 2017 and 2019 and these contracts had material expectations in revenue terms. The street also applauded these contracts, waiting for them to materialise.

Equirus states that the company is yet to realize any material revenue from any of these contracts.

The first contract, highlighted in the table, saw overruns in capex and was later terminated, for which Aarti Industries received compensation of $120 million to $130 million from the customer. The other contracts are also yet to materially contribute to the company’s financials.

Despite winning a major long-term contract, the shares of Aarti Industries are already down 8% in the new year, highlighting the challenges associated with long-term contracts.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Agrochemical firm UPL to raise funds up to ₹4,200 crore via rights issue

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Agrochemical firm UPL on Friday (December 22) said its board of directors has approved a proposal for raising funds amounting to ₹4,200 crore.

“…we wish to inform you that the Board of Directors of the Company at its meeting held today, i.e., on Friday, 22nd December 2023, inter alia, approved the proposal for fundraising for an amount aggregating up to ₹4,200 crore subject to receipt of statutory/regulatory approvals, as may be required under applicable law,” UPL said in a regulatory filing.

The process will adhere to the regulatory framework, encompassing the Securities and Exchange Board of India (Issue of Capital and Disclosures Requirements) Regulations, 2018, subject to any subsequent amendments.

Also Read: Ravi Jaipuria of Varun Beverages is now richer than India’s richest banker: CNBC-TV18 Edge

“For the purposes of giving effect to the rights issue, the detailed terms to the rights issue including but not limited to the issue price, rights entitlement ratio, record date, timing and terms of payment will be determined in due course by the Board or duly constituted committee of the Board,” the company added.

Last week, UPL announced that Dow Jones included the company in its sustainability and emerging market indices — Dow Jones Sustainability Index (DJSI) — after its outstanding performance on sustainability parameters. This was the first agrochemical company included in the esteemed Dow Jones Sustainability World and Emerging Markets Indices (DJSI).

With annual revenues of more than $6 billion, UPL is one of the largest agriculture solutions firms. Its portfolio comprises biological and traditional crop protection solutions with over 14,000 registrations. It has a presence in over 130 countries.

Also Read: Hyperloop One, high-speed transportation firm to shut down

UPL reported a net loss of ₹189 crore in the July-September quarter of the current financial year FY24 against a CNBC-TV18 poll estimate of ₹324 crore profit. Besides, revenue declined to ₹10,170 crore against the street estimate of ₹10,811 crore.

Shares of UPL Ltd ended at ₹581.70, up by ₹3.80, or 0.66%, on the BSE.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow