UPL trades lower as Moody’s downgrades stock on poor agro-chem fundamentals

Moody’s said that the downgrade is driven by “a protracted deterioration in the agrochemical industry fundamentals that will keep UPL’s credit metrics weaker than expected”

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Shares of UPL fell 0.3 percent at the open on February 6, a day after credit rating agency Moody’s downgraded the agriculture solutions provider to Ba1 (subject to substantial credit risk). At 9:20am, the stock was trading at Rs 480.35. The stock has lost over 31 percent in the last one year.

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Moody’s in a February 6 statement downgraded UPL to Ba1 from Baa3 and maintained the negative rating outlook on the agrochemical solutions’ segment. In  a note, the rating agency said that the downgrade is driven by “a protracted deterioration in the agrochemical industry fundamentals that will keep UPL’s credit metrics weaker than expectations for an investment-grade rating”.

Also read: UPL gets stuck in a global maelstrom of inventory overload in chemicals sector

UPL announced its Q3FY24 earnings on February 2. For the reporting period, the company’s net loss stood at Rs 1,217 crore against Rs 1,087 crore a year back, while its revenue from operations fell 27.72 percent to Rs 9,887 crore from Rs 13,679 crore. The company’s EBITDA for the reporting period fell to Rs 416 crore in Q3FY24 from Rs 3,034 crore last year and EBITDA margin fell to 4.21 percent from 21.2 percent.

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