Agro-chemical firm UPL Ltd reported a consolidated net loss of Rs 189 crore for the second quarter of 2023-24 due to a decline in revenue caused global ‘channel destocking’. In the same quarter of the previous fiscal year, the company had recorded a net profit of Rs 814 crore, as per a regulatory filing. Total income for the quarter decreased from Rs 12,507 crore to Rs 10,170 crore year-on-year.
The company’s revenue from operations in India also saw a decline, with Rs 1,387 crore in the current quarter compared to Rs 1,809 crore in the year-ago period. CEO of UPL Corporation Ltd, Mike Frank, attributed the challenging phase for the global agrochemical industry to lower prices, elevated channel inventory levels, and intense price competition. Distributors focused on destocking and purchasing at lower prices, impacting revenue and profitability in the second quarter, particularly in the US and Brazil.
However, UPL remains optimistic about improved performance in the second half of the fiscal year as key regions such as North America, Latin America, and Europe enter their major cropping seasons. The company expects the elevated inventory levels to gradually subside, supported strong farm gate demand. Inventory levels have largely normalized in Europe, Asia, and Latin America (excluding Brazil), while gradual improvement continues in North America and Brazil. Frank noted that most post-patent molecule prices have stabilized after reaching their lowest point in the second quarter.
Despite the challenging market conditions, UPL is executing well and implementing changes to its operating model in preparation for the normalization of the market cycle. On the stock market, UPL’s shares settled at Rs 538.40 apiece, marking a decrease of 3.64% on the BSE.