UPL Q2 profit seen up 45%, RoW market may see 17% growth

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Crop protection, chemicals and seeds company UPL's (erstwhile United Phosphorous) July-September quarter net profit may increase 45 percent year-on-year to Rs 241 crore, according to average of estimates of analysts polled by CNBC-TV18. On sequential basis, analysts expect a quiet quarter with sequentially growth lower. UPL will announce its earnings on October 26.

Revenue is seen rising 8.8 percent to Rs 2,897 crore in quarter ended September 2015 compared to Rs 2,662 crore in year-ago period.

Barring Brazil and Europe, most geographies could see steady growth. Analysts see 10-11 percent growth in domestic markets and 10-12 percent growth in international markets while Rest of World market may see robust 17 percent growth including Latin America ex-Brazil.

Operating profit is likely to increase 10.4 percent year-on-year to Rs 530 crore and margin may expand 30 basis points to 18.3 percent in the quarter gone by.

Margin may remain stable owing to costs curtailed but cross currency headwinds are likely to impact margin. Products such as Ulala have seen a sharp jump owing to certain infestations in North India.

Key factors to watch out for would be outlook on demand given erratic and deficient monsoons, impact of business in Brazil due to macro headwinds and growth trajectory in India and Latin America (25-30 percent each of revenue). Update on season in US, EU & Kharif crop in India, and sales split between herbicides, insecticides, fungicides & others will also be watched.