UPL rises and falls

Notwithstanding all the controversy around the resignation of its auditor from its Mauritius subsidiary, the company brought some cheer with its performance for Q2FY21.

Its consolidated net profit for the quarter rose over 165% (YoY) to Rs.537 crore though QoQ, it fell 18%. Its revenue rose 14% (YoY) to Rs.8939 crore. Volume growth was at 19%.

EBITDA for the quarter rose 17% at Rs.1808 crore while margins remained steady at 20%.

All geographies did well with India reporting a 18% growth, RoW was up 27%, Latin America was 12%, Europe 6% and North America was up 9%.

The company, for FY21 continues to remain optimistic. It has maintained its guidance of 6-8% growth in revenue and 10-12% in EBITDA. The company said that growth will be driven by a focus on differentiated solutions as well as new product launches, price increases in local currencies and cost savings to support margins.

As of 30th September 2020, net debt was Rs.23,841 crore, higher by Rs.1,781 crore compared to 31st March 2020 mainly due to an increase in working capital of Rs.2,915 crore, in line with the seasonality of the business.

The market’s initial reaction was positive, with the stock opening at its intraday high of Rs.465.15, up 2.5%. Profit booking at this level pushed down the stock into the red , going down almost 5% to Rs.431.60.