UPL to withstand supply chain constraints, resulting in an 18% increase in sales in the September quarter. Growth is driven by a 15% increase over the same period last year, which is impressive given the product constraints facing the industry. India’s sales are up 5%, ahead of Rallis India and Dhanuka Agritech.
At the consolidation level, Sharda Cropchem also recorded above average sales growth. This shows that demand in the global market has improved. Like UPL, Sharda generated most of its revenue from overseas markets and recorded decent sales growth for the rest of the fiscal year.
Still, UPL and Sharda shares fell after the September quarterly closing. UPL was one of the biggest losers of Nifty 50 shares on Monday. Gross profit margin and operating profit margin declined in both companies.
Compared to sharders, UPL has a greater production presence and is less dependent on external raw materials and intermediates. Still, when the operating margin fell below 20%, investor sentiment declined.