UPL's profit declines by 42% in March quarter as raw material costs surge

BENGALURU (Reuters) - Indian agriculture chemicals producer UPL Ltd reported a 42.6% fall in fourth-quarter profit on Monday, hurt by rising raw material costs.

The herbicides and insecticides maker's consolidated net profit fell to 7.92 billion rupees ($96.88 million) for the three months ended March 31 from 13.79 billion rupees a year earlier.

The Mumbai-based company's revenue from operations rose 4.5% to 165.69 billion rupees, with its Latin American operations raking in about 39% of the total revenue. North America came in second with 18.16%

However, this was not enough to offset the 11.2% rise in total expenses to 154.80 billion rupees, with the cost of materials accounting for nearly two-thirds of it at 98.21 billion rupees.

The quarter was impacted by a rapid decline in product prices and delays in the planting season, UPL said. "Decline in post-patent product prices with the ramp-up of supply from China, idle capacity costs..." also impacted the quarter, the company added.

Net debt came in at $2.06 billion as of March 31, 2023, 3% above the company's guidance of $2 billion.

UPL's shares have risen 0.82% this year, compared to a 0.96% gain in benchmark Nifty 50.

Earlier this year, UPL revealed that a $200 million investment in agrochemical maker UPL Sustainable Agri Solutions Ltd was complete and that it planned to use the money to reduce debt.

($1 = 81.7510 Indian rupees)

 

(Reporting by Meenakshi Maidas in Bengaluru; Editing by Sonia Cheema and Janane Venkatraman)