Q4FY22 Preview: UPL: Revenue seen at Rs151,606 million, adjusted PAT at Rs12,797 million

6 May 2022 , 11:08 AM

Result date: 9^th May, 2022
Recommendation: Buy
Target price: Rs1,080
 
UPL is likely to post healthy growth in revenue as well as profits for the March 2022 quarter, over the year-ago quarter. Consolidated revenue could grow 18.5%, primarily driven by double-digit growth across India, LatAm and North America. Europe and the Rest of the World regions are likely to deliver somewhat slower growth. Firm pricing in agri-commodities globally could aid realizations during the quarter.

Among key markets, Latin America is likely to witness some impact from drought in Brazil. However, the same could be offset by favorable forex movement and overall volume growth. UPL’s performance in North America should be supported by the price hikes taken during the quarter. Europe could post low single-digit growth. India business could perform better, with sales returns of excess Kharif inventory having cleared up the channel.

While input costs have been on an upswing, price hikes and improving share of high-margin markets will aid UPL’s margins.
Adjusted for the forex gain of Rs1.2 billion in the year-ago quarter, UPL’s Profit After Tax (PAT) could grow 22.2%.

Important management insights to watch out for:
·         Outlook on demand across all segments and markets
·         Impact of geopolitical crisis in Ukraine
·         Details about the latest acquisition, OptiCHOS

Rs Million	March 2022 estimates	YoY change
Revenue	151,606	18.5%
EBITDA	32,444	14.3%
Adjusted Profit After Tax	12,797	12.0%
Adjusted EPS (Rs)	16.7	22.2%

Source: IIFL Research