UPL share price rises 7%: Q2 results saw volume driven growth continue despite margin pressures: What Lies Ahead?

Stock Market today: UPL Ltd share price gained more than 7% in the morning trades on Tuesday. UPL had reported its Q2 results on Monday and Volume Driven Growth continued though was offset by price decline

UPL share price opened at ₹520.05 on Tuesday on the BSE, slightly higher than the previous close of ₹515.10. UPL share price thereafter gained to intraday highs of ₹552.70 , which translated into gains of more than 7%.

UPL said that Q2 saw Volume Driven Growth, With Focus On Increasing Market Share.

The revenues of UPL Ltd at ₹7,676 crore grew 4% year on year. The volumes improved 13% year n year but were offset by 8% price declines.

Fungicides volumes grew in Brazil (mancozeb), Europe though herbicides volume were impacted in Argentina, North America; key insecticide AI prices eroded in Brazil, partially offset by North America volumes.

However the contribution margin contracted due to overall pricing pressure mainly in LATAM, and unfavorable mix in Europe said the company.

Earnings Before Interest Tax Depreciation and Amortisation (Ebitda) at ₹745 crore declined 9% year on year.

UPL reported a net loss of ₹443 Crore

Analyst Views

Analysts at Kotak Institutional Equities said that UPL’s 2QFY25 earnings missed estimates as a revenue beat was more than offset by pressure on margins. Achievement of FY2025 guidance will require sharply improved margins in 2HFY25—an expectation management stands by. For now Kotak has left its Ebitda estimates unchanged but has cut Earnings per share estimates to factor in increased tax rate guidance .

Antique Stock Broking said that UPL witnessed operational pressure on account of channel destocking and high-cost inventory during 1HFY25. However, it expects strong recovery YoY in 2HFY25. Antique believes that the worst is over for global/ export players. Antique expects the recovery to be gradual in nature and UPL to be a key beneficiary.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.