UPL Stock Plummets 6% Following Q4 Results: Expert Analysis on Future Investment Strategy

• Shares of UPL, a leading provider of agricultural solutions and services, witnessed a 6% slump in today’s intraday trade, reaching ₹501.65 apiece.
• The company recorded a revenue of ₹140.8 billion in the fourth quarter of FY24, marking a 15% year-on-year decline.
• The EBITDA stood at ₹19.3 billion, significantly higher than the estimated ₹13.2 billion, representing a 36% year-on-year decrease.

UPL shares slump 6% despite higher-than-expected Q4 revenue. The company’s EBITDA also surpassed estimates, but marked a 36% YoY decrease.

UPL Shares Experience Downturn

Following a strong surge in the last two trading sessions, shares of UPL slumped 6% in today’s intraday trade. This downturn came despite the anticipation of favorable financial results from the company. The company’s shares reached ₹501.65 apiece.

Q4 Revenue and EBITDA

In the fourth quarter of FY24, UPL recorded a revenue of ₹140.8 billion, marking a 15% year-on-year decline. This figure was notably higher than the estimated ₹114.7 billion by domestic brokerage firm Motilal Oswal. The EBITDA stood at ₹19.3 billion, significantly higher than the estimated ₹13.2 billion, representing a 36% year-on-year decrease. The EBITDA margin also experienced a decline, dropping by 450 basis points year-on-year to 13.7%; however, this surpassed the estimated 11.5%.

Future Outlook

On the guidance front, the company expects normalization of the crop protection business in 2HFY25 and strong performance of the seeds business in FY25. The management has guided for 4–8% revenue growth in FY25, with absolute EBITDA growth of over 50% and CFO generation of USD 300–400 million. The company targets to utilise the entire FY25 CFO for debt reduction.

Conclusion

Despite the slump in UPL’s shares, the company’s Q4 revenue and EBITDA surpassed estimates. The company expects normalization of the crop protection business in 2HFY25 and strong performance of the seeds business in FY25. With a guided revenue growth of 4–8% in FY25, UPL aims to utilise the entire FY25 CFO for debt reduction.