UPL Stock Performance: A Reflection of its Financial Health?

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UPL Stock Performance

Last Updated on March 12, 2024 by admin

UPL Limited, formerly United Phosphorus Limited, is an Indian company that manufactures and markets chemicals for agriculture and industries. The company also provides farmers advisory, training and spraying services and works on addressing common agricultural problems. UPL’s market capitalisation stands at Rs. 50,557.20 crore, with the UPL share price at Rs. 669.10 at the time of writing. Learn to know about UPL Stock Performance.

Following are the highlights that reflect UPL’s financial health:

  • The company has a high trailing 12-month (TTM) earnings per share.
  • The return on capital has been improving in the last two years as the company has effectively used its capital to generate profit.
  • Additionally, the return on equity has improved in the last two years as UPL has used shareholder funds efficiently.
  • In its Q1 FY’23, UPL announced its revenue growth of 27% YoY to reach Rs.10,821 crore. The growth has resulted from better product realisation (18%), a favourable exchange rate and higher volumes.
  • EBITDA also grew by 26% YoY to Rs. 2,342 crore. Despite inflationary challenges, a significant increase in realisations supported by effective supply chain management helped to preserve EBITDA margins.
  • Despite significant input cost increases and a problematic macroeconomic climate made worse by geopolitical concerns, the EBITDA margin held steady. This was made possible by proactive pricing decisions and effective supply chain management.
  • The Gigaton Carbon Goal, a global campaign to store one billion metric tonnes of atmospheric carbon dioxide by 2040, was launched in Europe in collaboration with the FIFA Foundation.

The mentioned points display the company’s strong fundamentals and a good investment opportunity for the investor. However, it is also essential to keep some of the weaknesses in mind too:

  1. The company has suffered insufficient cash flow from core operations in the last two years, leading to declining cash flows.
  2. UPL has also faced reduced net profit with a decline in profit margins QoQ.

For an investor, it is essential to consider the tiniest of details before choosing a stock. But the UPL share price looks promising with its current fundamentals.Furthermore, the company looks forward to increasing the accessibility of its products to farmers around the world by utilising its cost leadership and manufacturing skills. UPL is eyeing an annual growth of 7-10% over the long term. 

UPL also acquired ArystaLifeScience, a global provider of crop protection solutions, through its subsidiary. The company drew a debt of USD 3 billion from a syndicate of banks for the same. The company looks aptly positioned to benefit from the growth of the crop protection solutions market over the long term and the extensive marketing network provided by the acquisition.

Conclusion

The UPL share price performance reflects its financial health and should be considered part of the portfolio if the investor seeks to include agri-based stock.

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Sophia Anderson
Sophia Anderson is a finance writer and blogger with a passion for helping people improve their financial literacy. With over 5 years of experience in the finance industry, Sophia has worked with individuals, families, and small businesses to provide financial advice and guidance. Her expertise includes budgeting, saving, credit management, and debt reduction. Sophia is dedicated to breaking down complex financial concepts into easy-to-understand language and empowering her readers to make smart financial decisions. She is a frequent contributor to financial publications and has written extensively on topics such as personal finance, investing, and financial planning. Sophia's mission is to help people take control of their finances and achieve financial security and freedom. When she's not writing, Sophia enjoys hiking, practicing yoga, and reading personal finance books.