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UPL Q1FY20 earnings: Arysta’s numbers likely to boost June quarter results

Updated : July 31, 2019 08:32 AM IST

UPL is likely to post a good set of earnings for the quarter ended June 30 on Wednesday. The company will include Arysta’s numbers in June quarter earnings so the growth will look very elevated. The Street is expecting revenue growth of 91 percent. That means a revenue of around Rs 7,900 crore. EBITDA also will increase by 93 percent.

Operating profit margins will see an increase of 20 basis points (bps). However, the profit growth will be limited at 8 percent because of one-time integration cost.

In terms of the core business – that is removing the impact of Arysta – the revenue should grow by 9.5 percent and the EBITDA should increase by around 10.25 percent.

In terms of margins, last quarter the company reported margins of 16.5 percent. So the margins are expected to improve because the write-offs from Arysta’s inventory is expected to be lower in Q1FY20.

In terms of one-time integration cost, it is expected at Rs 140 crore, the yearly guidance is around Rs 460-540 crore and also very important is the management commentary on the North American and the European markets where there has been a slowdown.

The management has guided for 8-10 percent of revenue growth, EBITDA growth of 16-20 percent and debt reduction of around Rs 3,000 crore. So whether they maintain their guidance or not is something that the street will be closely watching out for.
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