UPL Q2 revenue grows 6% YoY

UPL reported 2Q18 revenue/EBITDA/PAT of Rs38bn/Rs7.2bn/Rs2.4bn growing 6%/12%/44% YoY.

It was another quarter of moderate growth for LATAM – the key growth driver for UPL - which grew 5%YoY and was impacted by late onset of monsoon and high channel inventories in Brazil.

Other geogrphies performed in-line with estimates –(i) India witnessed revenue growth of 10% driven by re-stocking following GST but negatively impacted due to untimely rainfall towards the end of the season (September), which destroyed some of the crops. (ii) Europe witnessed revenue growth of 5% driven by strong growth in the company’s herbicides portfolio for potato, oilseeds and cereal crops, (iii) North America witnssed revenue growth of 5% largely driven by Glufosinate and (iv) ROW grew 5% driven by strong performance in Philippenes and Indonesia, partly offset by dry weather in Australia.

The company’s first half growth of 6%, despite challenging business environment globally and a likely 3rd consecutive year of industry de-growth, is an indication that UPL has still managed to stay ahead of the game.

UPL is in for headwinds in the upcoming quarters driven by better rabi propects for India, healthy sugarbeet acreages in Europe and new product launches in Brazil.