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UPL Q1 Results Fy22-2023

03 August 2022

The Indian multinational chemicals company, UPL Ltd, announced its financial results for the first quarter of FY23 on 1st August 2022. The company reported a 29.54% YoY (year on year) increase in its profit after tax (PAT) to Rs. 877 crore in Q1 FY23 from Rs. 677 crore in Q1 FY22.

The rise in UPLs profits is attributable to a robust operational performance by the company, led by an increase in its revenue from operations, which stood at Rs. 10,821 crore in this quarter, jumping 27.08% YoY from Rs. 8,515 in the same quarter of the previous year. This was on account of better product realisations (up 18% YoY), favourable exchange rate (up 3% YoY), and higher volumes (up 6% YoY), as stated by the company’s management. There was also a reduction in the finance costs of the company.

The EBITDA of UPL Ltd. stood at Rs. 2,342 crore in Q1 FY23, displaying a 26% YoY growth from Rs. 1,862 crore in Q1 FY22. However, the EBITDA margin fell slightly by 23 bps to 21.6% in Q1 FY23 from 21.9% in Q1 FY22. The EBITDA margins were maintained despite inflationary pressures, aided by a significant uptick in realisations supported by efficient supply chain management.

Operating margin of the Mumbai-headquartered company stood at 14.39% in Q1 FY23 as against 14.36% in Q1 FY22. At the same time, the net profit margin increased to 9.29% in the quarter under review as against 8.81% in the same quarter of the previous year. 

The net worth of the company jumped up to Rs. 29,622 crore in Q1 FY23, a 15.2% YoY increase from Rs. 25,713 crore in Q1 FY22. 

The earnings per share (EPS) of the company stood at Rs. 10.76 in Q1 FY23, increasing 33.17% YoY from Rs. 8.08 in the same quarter of the previous year. At around 3 pm, minutes after the results were declared during the market hours, the UPL share reacted positively to the results announcement and shot up 3.9%, trading in the green at Rs. 774.40 per share. 

Hits of UPL Q1 Results 2023

  • Profit after tax increased 29.54% YoY to Rs. 877 crore in Q1 FY23.
  • Revenue from operations stood at Rs. 10,821 crore in this quarter, jumping 27.08% YoY.
  • EBITDA stood at Rs. 2,342 crore in Q1 FY23, displaying a 26% YoY growth.
  • Operating margin stood at 14.39% in Q1 FY23 as against 14.36% in Q1 FY22.
  • Net profit margin increased to 9.29% in Q1 FY23 as against 8.81% in Q1 FY22. 
  • Net worth of the company jumped up to Rs. 29,622 crore in Q1 FY23, increasing 15.2% YoY.
  • Earnings per share stood at Rs. 10.76 in Q1 FY23, increasing 33.17% YoY from Rs. 8.08 in Q1 FY22.

Misses of UPL Quarterly Results 2023

  • EBITDA margin fell slightly by 23 bps to 21.6% in Q1 FY23 from 21.9% in Q1 FY22.

Segment-wise revenue under UPL Q1 Results of 2023

  • Agro Activities: Revenue increased 25.53% YoY to Rs. 10,168 crore in Q1 FY23 from Rs. 8,100 crore in Q1 FY22. 
  • Non Agro Activities: Revenue increased 53.69% YoY to Rs. 770 crore in Q1 FY23 from Rs. 501 crore in Q1 FY22.
  • Unallocated: Revenue decreased 50% YoY to Rs. 1 crore in Q1 FY23 from Rs. 2 crore in Q1 FY22. 

What the management says about UPL Results

Commenting on the performance, Mr. Jai Shroff, CEO – UPL Ltd., said “After a strong end to FY2022, we continued to see solid growth momentum in Q1 FY23, asthe strong agri commodity prices drove significant uptick in price realizations as well as healthy demand from growers. The EBITDA margin remained largely intact despite the significant input cost inflation and a challenging macro-economic environment exacerbated by geopolitical issues. This was driven by proactive pricing actions coupled with efficient supply chain management that led to the strong topline growth getting translated into robust operating profitability growth as well. 

Powered by our OpenAg purpose, we continued to leverage collaboration as a catalyst for sustainable and lasting change. In partnership with the FIFA Foundation, we held the European launch of Gigaton Carbon Goal, a global initiative to sequester one billion metric tonnes of atmospheric carbon dioxide by 2040. And in Brazil, we announced a new agreement with Bunge to establish Orígeo, an innovative company providing end-to-end solutions to help increase farmer’s productivity, profitability and sustainability.

Moving on, as we look ahead to the rest of the year, we are well poised to continue our healthy growth momentum, as product realizations continue to remain strong, recent new launches continue to see good traction in the marketplace, and the overall demand outlook continues to be constructive. Considering this positive outlook, we have revised our FY23 guidance upwards, expecting to achieve a revenue growth of 12-15% now versus 10% earlier, and EBITDA growth of 15-18% versus 12-15% earlier.”

Other things to know about UPL

  • UPL entered into a new supply agreement with Bayer for “Spirotetramat”, an insecticide to develop novel differentiated pest management solutions. 
  • UPL launched Zoatin, a bionutritional to increase crop health and yield in partnership with Christian Hansen. This is the first product to be launched from UPL’s global partnership with Christian Hansen to develop microbial biosolutions.  
  • UPL and Bunge from a JV ‘Orígeo’ targeting large farms in a specific area of Brazil to increase Brazilian farmers’ sustainability, productivity, and profitability, subject to antitrust approvals.
  • As a part of its collaboration with MMAG (subsidiary of Mitsui Chemicals Agro Inc.), UPL launched a new insecticides range in India containing the patented molecule ‘Flupyrimin’ to target the most damaging rice pests. 
  • The company launched Gigaton Carbon Goal in Europe, a global ecosystem that will harness sustainable agricultural practices to reduce atmospheric carbon dioxide by 1 billion metric tonnes by 2040.
  • UPL won the Corporate Social Responsibility award at 19th FICCI CSR Awards.

To read the RA disclaimer, please click here
Research Analyst: Bavadharini KS

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