UPL Q3 Results Review - Higher Realisation Continues To Drive Growth: Motilal Oswal

Motilal Oswal Report

UPL Ltd. reported revenue of Rs 136.8 billion (above our estimate of Rs 133.3 billion) in Q3 FY23, up 21% YoY (volume: up 1%, price: up 13%, exchange: up 7%). Ebitda stood at Rs 30.3 billion (below our estimate of Rs 31.9 billion), up 14% YoY, aided by an improved product mix and portfolio rationalisation.

Ebitda margin contracted by 140 bps YoY to 22.2% in Q3 FY23. Adjusted profit after tax stood at Rs 13.4 billion (below our estimate of Rs 14.3 billion), up 11% YoY. The effective tax rate stood at 9.2% in Q3 FY23.

UPL's revenue in North America grew 30% YoY, driven by high commodity prices. In Latin America, revenue was up 28% YoY, aided by strong growth in insecticide/ fungicide/herbicide in Brazil/Mexico/Argentina.

India revenue grew 19% YoY, led by strong price realisation and healthy traction in the seeds business. However, unfavorable weather conditions and high channel inventory impacted the demand.

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