On February 2, 2024, UPL Limited (BSE, NSE: UPL) announced its Q3 2023-24 results, recording stability in prices on a QoQ basis in the crop protection business and an uptick in volumes in the Company’s Latin American business.
Table of Content
Main Result Takeaways
As market headwinds continue to persist, causing an underperformance on guidance in Q3 FY 24 results, the Company has taken steps to remain resilient in the times ahead. Here are the highlights of Q3 FY24 results of UPL Limited:
- The Revenue of the Company stood at ₹9,887 Cr, down 28% YoY.
- The EBITDA was down by 86% YoY and stood at ₹416 Cr, versus the previous fiscal’s same quarter when it was at ₹3,035 Cr.
- The EBITDA Margin was at 4.2% in Q3 FY24 relative to 22.2% in FY23, decreased by 1,800 bps YoY for this fiscal’s Q3.
Additional Read: Q3 Results Dashboard
Q3 Performance – Interpretation for UPL’s Quarter
Here is a brief discussion of the performance of UPL Limited in Q3 FY24:
- The decline in Revenue in Q3 FY24 was the result of destocking and low channel demand in the EU and NAM regions.
- The Company has experienced continuing pricing pressure in the post-patent segment spanning key markets.
- The Company’s Contribution Margin was affected by high-cost inventory liquidation as well as higher rebates to bolster channel partners. Contribution margins were up ~531 bps YoY in Q3 and ~395 bps YoY in 9M FY24, led by an improved mix, lower COGS, and improvement in B2C performance in Vietnam and Indonesia.
- The Sustainable and Differentiated Segments continued to outperform.
- Despite the quarter’s lower payables (decreased by $568 Mn), the Net Debt is largely aligned with December 2022, with adjustments for reduced factoring.
- In Q3 FY24, deleveraging remains a priority as the Company continues to explore new opportunities along with operational cash flows.
- The Company announced a rights issue of up to $500 Mn for the repayment of debt and to explore opportunities to raise capital across platforms.
- In Q3 FY24, the Company witnessed flat vs LY because of lower sales of Corn (Ecuador), Sunflower (Argentina, Europe), and Sorghum (Brazil, US).
The Management’s Take on Q3 Results
The CEO of UPL Limited had some key aspects of Q3 results to share and these are highlighted below:
- Destocking played a large part in weighing down the global agrochemical market. Overall, prices remained stable QoQ in the crop protection business.
- Given headwinds, Q3 performance was adversely impacted with the rest of the industry.
- A pick-up in volumes was witnessed in the Latin American side of the business.
- There was also a double-digit growth in Revenue in the ROW region.
- Crop protection revenue increased to 37% (overseas) compared to 28% in the previous year.
- The Company continued to execute initiatives of cost optimisation by reducing SG&A expenses by 19% YoY in Q3. UPL Limited is well on track to reduce our SG&A by $100 million in FY25.
Financial Results at a Glance
Here is a glimpse of the financial results of Q3 (figures in ₹ Cr as reported by the Company, except where indicated by %):
| Metrics | Q3 FY 2023-24 | Q3 FY 2022-23 | Change % |
| Revenue | 9,887 | 13,679 | (28%) |
| EBITDA | 416 | 3,035 | (86%) |
| EBITDA Margin | 4.2% | 22.2% | (1800 bps) |
| Profit Before Tax | -1,623 | 1,481 | – |
| Profit After Tax (PAT) | -1,217 | 1,087 | – |
Additional Check: UPL Limited Share Price
Q3 FY24 Result Summary
UPL Ltd. is an internationally known provider of sustainable agriculture products and solutions. It boasts a revenue above $6 billion. The Company is a purpose-driven enterprise that is focused on enabling progress for the whole agricultural value chain. While providing sustainable agricultural solutions, the Company strives towards the aim of making every food product more sustainable. The Company has a distinctive and diverse portfolio comprising traditional crop security solutions and biologicals with over 14,000 registrations. Having a presence in over 138 countries, the Company is represented by over 10,000 partners and professionals on a global level of operations. The Company’s integrated portfolio contains valuable solutions related to post-harvest processes, seeds, and a plethora of digital and physical services linked to agriculture and its functioning.
In Q3 FY24, the agrochemical major experienced a loss, whereas it had posted a profit in the same quarter of the previous fiscal year. This was largely due to global channel destocking as well as continuing pricing pressure in the space of post-patents. All this was exacerbated by higher rebates to aid channel partners and this adversely affected the Company’s contribution margin. However, sources from the Company have announced that the firm is well-poised to bring down its SG&A in YY25, by USD 100 million. The main priority of the Company is to decrease debt and it is optimistic about upcoming quarters to achieve this goal.
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Source: UPL Press Release on BSE
