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UPL Q2FY22 Preview: Revenues expected to go up by 8.5%, EBITDA by 20%

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UPL is expected to post a good set of numbers. It is one of the cheapest stocks in the agrochem space despite being the biggest in market share. Overall revenues are expected to go up by 8.5%, EBITDA by 20% and profit growth is estimated at 63%.

UPL is expected to report a good set of numbers. It is one of the cheapest stocks in the agrochemicals space despite being the biggest in terms of market share. Overall revenues are expected to go up by 8.5 percent, while EBITDA growth is seen at 20 percent and margins are expected to rise by 200 basis points. Profit growth is estimated at around 63 percent.
The top-line growth this time around will be driven by the US and European businesses. The Latin American business, which is the majority chunk of their revenue, should witness high single-digit growth this time around.
Overall volume growth of 4 percent is expected alongside pricing growth of around 4 percent on year-on-year (YoY) basis. Gross margins will improve on YoY basis led by price hikes but will moderate on a sequential basis.
There is an expectation that logistics costs will also increase; this is something that we've seen across different segments in different industries. However, the Street will watch the management commentary on raw material inflation.