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Informist, Thursday, Jul. 31, 2025

By P. Madhu Kumar

MUMBAI – UPL Ltd. is likely to report modest earnings in the Apr–Jun quarter, with a slight year-on-year rise in revenue and earnings before interest, tax, depreciation, and amortisation. Still, the company will likely report a net loss because of the challenging global markets.

The company is likely to post a net loss of INR 1.94 billion in the June quarter, according to the average of estimates from six brokerages. The agrochemicals maker had reported a net loss of INR 3.84 billion in the year-ago quarter and net profit of INR 8.96 billion in the March quarter. 

Antique Stock Broking had the lowest estimate for net loss at INR 229 million and Kotak Institutional Equities had the highest at INR 3.44 billion.

UPL's revenue is projected at INR 93.30 billion, up 2.9% from a year ago but down 40% from the March quarter, according to the average of estimates. UPL had benefited from seasonal demand and year-end stocking in the March quarter. The estimates for revenue range from INR 90.20 billion by Motilal Oswal to INR 96.05 billion by Elara Securities.

UPL's June quarter performance is expected to be a mixed bag across geographies. Most brokerages anticipate a rebound in North America and India, aided by a low base and better seasonal demand. But Latin America may remain a weak spot for UPL, with brokerages highlighting weak demand, pricing pressure, and ongoing working capital issues in Brazil.

Anand Rathi expects 7% growth in North America and 15% in India, supported by favourable currency movements. The foreign exchange gains are likely to contribute positively to revenue, while pressure from high-cost inventory and rebates seen in previous quarters may have eased.

Kotak Institutional Equities expects a 6% year-on-year revenue growth in the latest quarter due to volume-driven recovery in the international market. However, UPL's Latin America business is likely to continue facing volume and profitability challenges, it said.

The earnings before interest, tax, depreciation, and amortisation for the quarter is projected at INR 11.84 billion, up 3.4% on year, but down sharply from the March quarter due to seasonal softness and global macro headwinds.

Nuvama Wealth Management expects volume decline and currency pressures in Latin America to drag down overall profitability. "We expect Americas and Europe to perform better, but Latin America will continue to face challenges, especially in Brazil. Rising interest costs due to currency appreciation may further hurt the bottom line," the brokerage said.

Most analysts anticipate only a mild improvement in the EBITDA margin due to favourable seasonal factors, but not enough to meet the company's full-year margin growth guidance. Kotak estimates UPL's EBITDA margin at 19%, supported by seasonal improvement and better cost management. However, the brokerage warns UPL might fall short of its FY25 EBITDA growth guidance of over 50%, especially if global demand remains soft.

Antique Stock Broking is more optimistic, projecting EBITDA at INR 13.37 billion, reflecting better cost control and easing of high-cost inventory impact. Similarly, Anand Rathi expects margins to improve on year as pricing pressure in key markets begins to ease.

Nuvama believes India could be one of the few bright spots in the company's portfolio this quarter. However, it cautions that foreign exchange costs and working capital could limit the upside.

Despite the modest year-on-year gains in its top line and EBITDA, UPL's June quarter performance is likely to fall sharply sequentially. Revenue and EBITDA are expected to fall sharply from the March quarter due to the seasonal nature of the agrochemical business and weaker global demand. The company had benefited from year-end buying, particularly in North America, in the March quarter.

Nuvama and Kotak have highlighted persistent weakness in Latin America, especially Brazil, as a major concern. The global supply-demand imbalance in agrochemicals and rising interest and forex costs could also weigh on earnings in future quarters. Motilal Oswal pointed out that raw material price trends, debt levels, and future capex will be key areas to watch.

Out of the eight brokerage reports available on the company, five brokerages have a ‘buy' rating with an average target price of INR 735. Three brokerages have a ‘hold' rating on the stock. Thursday, shares of the company ended 2.5% higher at INR 703.80 on the National Stock Exchange. UPL is scheduled to announce its Apr–Jun earnings on Friday.

Following are the Apr-Jun earnings estimates for UPL Ltd. based on reports from 6 brokerage firms in descending order by the estimate of net profit, in INR million:

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Edited by Saji George Titus

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