UPL Q1 FY27 Results (NSE: UPL)
Signal: Loss reversed
The read
Q1FY27 consolidated PAT turned positive at ₹10 Cr after a year-ago loss of -₹88 Cr, but this was entirely on a one-off insurance arbitration gain of ₹55 Cr booked in other income — excluding that, the company reported a PBT loss of -₹109 Cr. EBITDA margin contracted 100bps YoY to 16.4% despite gross margin expansion, as employee costs (+15.5%) and other expenses grew faster than revenue. The standalone business remains constrained with revenue declining 15.8% YoY. The company continues to navigate a high finance cost burden (₹852 Cr) and thin interest coverage.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹10,181 Cr | 10.5% | -44.5% |
| EBIT | ₹835 Cr | 3.3% | |
| Net profit | ₹10 Cr | 111.4% | |
| EPS | ₹0.12 | 106.2% | |
| EBIT margin | 16.4% |
P&L walk
Revenue grew 10.5% YoY but OPM contracted 100bps to 16.4%, with gross margin expansion offset by higher employee cost and other expenses; PAT swung to positive ₹10 Cr entirely on a one-off insurance arbitration gain of ₹55 Cr in other income — stripping that out, PBT was negative.
Segments
Crop protection segment (75% of revenue) grew 5.7% YoY but segment result margin compressed to 8.8% from 9.0%, dragged by higher employee and other costs; Seeds & Post harvest delivered strong revenue growth of 24.6% YoY and maintained healthy margins at 16.5%; Non-agro segment grew 32.7% YoY with margin expansion to 17.1%.
Key positives
- Consolidated revenue grew 10.5% YoY to ₹10,181 Cr, with Seeds & Post harvest segment surging 24.6% YoY.
- Gross margin expanded ~350bps YoY to 57.6%, reflecting input cost tailwind as raw material costs were flat YoY vs 10.5% revenue growth.
- Finance costs declined 15.4% YoY to ₹852 Cr, aided by net exchange gains on foreign currency loans.
- PAT swung from -₹88 Cr loss to +₹10 Cr profit, driven by a one-off insurance arbitration gain of ₹55 Cr.
Key concerns
- EBITDA margin contracted 100bps YoY to 16.4%, as employee costs (+15.5% YoY) and other expenses grew faster than revenue.
- Core operations remain loss-making: PBT before exceptional items was -₹100 Cr, and after one-off insurance gain, PBT was -₹109 Cr.
- Depreciation grew 13.8% YoY, outpacing revenue growth, indicating rising capitalisation burden.
- Standalone revenue declined 15.8% YoY, suggesting domestic formulations business faces headwinds.
- Other income (excluding insurance gain) of ₹162 Cr still constituted a very high share of PBT, obscuring core weakness.
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