On a consolidated basis, UPL reported a 13.3% jump in net profit to Rs 794 crore on 2.6% rise in net sales to Rs 9,126 crore in Q3 FY21 over Q3 FY20.
The agrochemical maker's profit before tax rose 2.33% year on year to Rs 1053 crore in Q3 FY21. Current tax expense was steeply higher at Rs 172 crore in Q3 FY21 from Rs 48 crore in Q3 FY20.EBITDA grew by 6% to Rs 2,209 crore in Q3 FY21 from Rs 2,076 crore in Q3 FY20. EBITDA margin improved to 24.2% in Q3 FY21 compared with 23.4% in the same period last year, driven by favorable mix of products and cost synergies. UPL said strong margins, cost synergies and cost-optimization measures has augured well for the company resulting in improved EBITDA margins.
UPL's India business continued to deliver sales growth in herbicides despite a slower market than H1. Latin America, Argentina, South Cone and Andean geographies experienced growth. The region overall was impacted by currency headwinds in LATAM countries combined with a delayed season by droughts in Brazil and Argentina, pushing sales to Q4. Favorable weather conditions in North America, increased demand for Glufosinate due to robust ramp up of resistant trait acres and growth in differentiated and sustainable solutions contributed to improved sales.
The rest of world saw double digit growth in Africa, Middle East, Australia and New Zealand. Strong growth was achieved in Southeast Asia due to Glufosinate expansion. Accelerated growth in China was driven by UPL's branded products in addition to the recent Yoloo acquisition.
Commenting on company's Q3 performance, Jai Shroff, CEO of UPL said, "We are pleased with the sustained progress reflected in the topline growth and improvement in margins. Our consistent efforts are bearing good returns. A notable achievement in the quarter is the commissioning of our state of the art manufacturing facility in Gujarat for producing 'Clethodim'- one of the largest post-emergence herbicides used to control perennial grasses. UPL will leverage its manufacturing capabilities and cost leadership to make Clethodim more widely available to farmers globally to meet their requirements of weed resistance. The company's endeavor to put Clethodim as a frontline agri-compound is further testament to the growing synergies between UPL and Arysta Lifescience which we acquired in 2019. UPL is confident that its foray into biologicals will soon spawn industry-leading agri-compounds."
Shroff added, UPL is poised to outgrow the global crop protection industry through innovation of newer products led by its R&D capabilities and its strong global footprint. The results, thus in the backdrop of a global pandemic, demonstrate our resilience and commitment for growth for all our stakeholders.
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UPL also announced that its debt management measures had yielded good results. During the quarter, the company continued with its strategy to deleverage the company's balance sheet and redeemed its bonds that were due in October 2021. Post the redemption, the Gross Debt stands at Rs 27,837 crore as compared to Rs 31,817 crore in the last quarter. The company said it is committed to reducing net debt in Q4 and maintaining an investment grade credit rating.
UPL maintained guidance of 6-8% growth in revenue and 10-12% in EBITDA. Favorable agronomic conditions and strong agriculture commodity prices augur well for the business and is expected to support the growth momentum.
Shares of UPL fell 0.98% to Rs 560.15 on Friday. UPL is a global provider of sustainable agriculture products & solutions, with annual revenue exceeding $5 billion.
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