iifl-logo-icon 1
IIFL

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

  • Open Demat with exclusive Advice & Services
  • Get a dedicated Relationship Manager to help you grow your wealth
  • Exclusive advisory on 20+ trading & wealth-based investment options
  • One tap Investments, Automated trading & much more
  • Minimum 1 lakh margin required
sidebar image

Q3FY24 Review: UPL: Weak performance elevates leverage concerns

5 Feb 2024 , 11:32 AM

UPL’s performance worsened in Q3 with revenue declining 28% owing to destocking and profitability coming under severe pressure due to liquidation of high-cost inventory and the provision of higher rebates to support channel partners and high sales return. Such weak performance puts the company in a difficult position to meet the rating agencies 2.25x criteria of net debt/EBITDA. The debt has ballooned to US$4.3Billion while EBITDA plunged 56% over the year-ago quarter to ₹3.5 Billion during the nine months of FY24. 

UPL’s gross debt rose to ~₹362 Billion with net debt at ₹313 Billion. The management remained confident of reducing to reduce net debt from the current US$3.7 Billion to US$2.5-2.0 Billion. Additionally, the company has board approval to raise up to $500 Million through rights issue and is exploring g capital raise opportunities in platforms.

With the pricing headwinds likely to sustain, analysts at IIFL Securities have cut their FY25-26 earnings estimates by 28-17%. They expect the stock to underperform as weak performance will curtail cash flows and elevate balance sheet leverage concerns. They have downgraded the stock to Reduce. Their Target Price, rolled over to March 2025, comes down to ₹480 (down from ₹605).

Related Tags

  • UPL
  • UPL Q3
sidebar mobile

BLOGS AND PERSONAL FINANCE

Read More
Knowledge Centerplus
Logo

Logo IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000

Logo IIFL Securities Support WhatsApp Number
+91 9892691696

Download The App Now

appapp
Knowledge Centerplus

Follow us on

facebooktwitterrssyoutubeinstagramlinkedin

2024, IIFL Securities Ltd. All Rights Reserved

ATTENTION INVESTORS
  • Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
  • KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
  • No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

RISK DISCLOSURE ON DERIVATIVES
  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to Rs. 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.

Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248

plus
We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.