UPL stock slumps 11% on weak Q3 performance, triggers downgrades

Weak near-term outlook could worsen cash flows for the company

The stock of the country’s largest agrochemical company by revenues, UPL, fell 11 per cent in trade on Monday after posting a weaker-than-expected December quarter performance.

While expectations on the performance in the third quarter were low, the results undershot even these estimates. The Street is worried that a weak operational performance going ahead could lead to higher working capital and weigh on cash flows. Some brokerages have cut their estimates and downgraded the stock.

Revenues of the company fell 28 per cent year on year (Y-o-Y) on the back of pricing pressures across markets. Fall in agrochemical prices led