UPL: Steady outlook after transient hiccups

Analysts see earnings growth driving stock price higher, but any big buy may stretch balance sheet

UPL’s performance for the June quarter (Q1) might have been impacted by many factors but 10 per cent volume growth was still encouraging. Revenues were disappointing; domestic growth came at just four per cent year-on-year (y-o-y), despite the launch of three new products. This was due to goods and services tax (GST)-led destocking. 

Its Latin American business grew by six per cent, but was hit by poor commodity prices, high channel inventories, and the drought in Mexico. The European business grew four per cent and was impacted by hot weather in southern Europe despite an improvement in beet acreage. UPL’s overall