(Reuters) – India’s UPL swung to quarterly profit on Friday helped by higher demand for agrochemical products following an above-average monsoon, while its costs fell.
The company reported a consolidated net profit of 8.28 billion rupees ($96 million) for the three months ended Dec. 31 against a loss of 12.17 billion rupees a year earlier. It posted losses in the previous two quarters.
Revenue from operations rose 10% to 109.07 billion rupees.
Total expenses fell 11% aided by a 16% drop in cost of raw materials consumed during the quarter.
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KEY CONTEXTIndia witnessed its highest monsoon rainfall this year since 2020, which aided sowing, as the annual showers provide 70% of the rain needed to water farms and replenish reservoirs and aquifers.
Peer Deepak Fertilisers and Petrochemicals has posted a more-than-four-fold rise in its quarterly profit, aided by strong demand for its crop nutrition products.
Analysts at Elara Capital said in a pre-earnings note that fertilizer companies would post healthy earnings growth in the third quarter, driven by volume growth in the urea business. PEER COMPARISON
Valuation (next Estimates (next 12 months) Analysts’ sentiment
12 months)
RIC PE EV/EBITD Revenue Profit Mean # of Stock to Div yield
A growth (%) growth (%) rating* analysts price (%)
target**
UPL 17.75 8.17 9.01 325.53 Buy 21 0.95 0.18
Dhanuka Agritech 18.74 13.62 15.23 16.62 Buy 10 0.75 1.03
PI Industries 27.31 19.04 12.72 9.43 Buy 24 0.75 0.45
Rallis India 23.28 11.89 10.33 29.63 Sell 13 0.93 1.09
* The mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER-DECEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 86.5860 Indian rupees
(Reporting by Ashish Chandra in Bengaluru; Editing by Mrigank Dhaniwala)
