PL First Cut – UPL 2QFY24

PL First Cut – UPL 2QFY24 – Swarnendu Bhushan – Co – Head of Research, Prabhudas Lilladher Pvt Ltd

UPL 2QFY24-Result First Cut- Miss on all fronts; Lowers FY24 guidance

(CMP-Rs543; Mcap-Rs417bn; ACC; TP-Rs740)

UPL reported 2QFY24 revenue/EBITDA/PAT of Rs101.7bn/Rs15.8bn/Rs-1.2bn (-19%/-43%/-123% YoY) and were below than our and Cons. Estimates.

❇️ Key highlights are:

(1) Volume and price decline of-7% and -15% YoY respt. Fx up +3% YoY.

(2) EBITDA margins at 15.5% down 666bps YoY led by liquidation of high cost inventory coupled with higher sales returns.

(3) LATAM/Europe/NAFTA/RoW/India posted -17%/-7%/-57%/-4%/-4% YoY growth in 2QFY24.

(4) NWC has increased by 25 days YoY to 149 days led by a) reduction in non-recourse factoring by Rs5.8bn YoY; b) lower payable days by 26 days

(5) Net debt stood at Rs307bn up Rs15.2bn QoQ and up Rs21.9bn YoY.

(6) Downward revised revenue growth to flat from 1 to 5% earlier and EBITDA growth guidance to 0 to -5% as against earlier guidance of 3-7%.