UPL Released FY2024 Results: Focus on Delveraging Balance Sheet in the Future

On May 13, 2024, one of the leading chemical manufacturers, UPL Corporation Limited, recently released its results for the fourth quarter and year ended March 31, 2024. During the quarter, the company witnessed margin recovery against the Q3 FY2024.

Revenue fell by 15% in Q4FY24, mostly due to reduced post-patent market prices. Volumes were generally consistent in line with prior years. Higher rebates to sustain the channel and the disposal of expensive inventory are the main factors affecting contribution margins.

The Sustainable and Differentiated portfolio kept performing better. In FY24, the portfolio’s share of CP revenue increased by almost 700 basis points year over year to 35%. SG&A costs were down 17% YoY in Q4 to ₹2,209 crore.

Looking Forward

The business expects the agchem market to revert to normal, which will drive growth and margin normalisation. Deleveraging its balance sheet is still its top objective, which it intends to accomplish through operating cash flows, the execution of the rights issue, and the pursuit of options for capital raise within its platforms.

“We delivered significantly improved financial results in Q4 versus the two preceding quarters, in spite of the prevailing volatile and challenging market conditions. As compared to Q3, volumes recovered well and were in line with LY, largely led by the strong performance of our high-margin differentiated and sustainable portfolio, which contributed 36% of crop protection revenue vs 29% LY. Our recent launches of Evolution, Feroce, and Shenzi did exceedingly well, growing volumes by >50%. In addition, Europe and the Rest of the World regions had a strong performance, posting double-digit growth, “ said Mike Frank, CEO of UPL Corporation Ltd.

He further added, “Contribution margins were in-line with last year, adjusted for the transitory impact of high-cost inventory liquidation and higher rebates to support channel partners. Our cost optimization efforts paid off as we reduced Q4 SG&A expenses by 17% YoY. Furthermore, Advanta, our global seeds platform continued to see robust traction delivering revenue growth of 34% and 38% respectively for the quarter.”

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