Shares of UPL Ltd slipped over 3 percent in the early trade on April 25 as weak quarterly earnings and a cautious commentary from global agrochemical major Adama dented sentiment.
Since UPL operates in the same geographies and segments that Adama does, a muted commentary coming from the global player triggered concerns of a similarly weak quarterly performance from the Indian firm.
At 10.41 am, UPL was down 1.4 percent at Rs 719.60 on the National Stock Exchange, though the stock was off the day's low of Rs 705.30.
Around 12 lakh shares of the company changed hands on the National Stock Exchange, as against 11 lakh shares in the previous session.
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Adama's revenue for the January-March period fell 11 percent on year to $1,259 million while EBIDTA (earnings before interest, taxes, depreciation, and amortisation) declined 18 percent to $165 million.
"Market demand is being supplied by the stockpiles of product in the channel high inventory levels and declining raw material pricing are also supporting a wait and watch approach," Adama president and chief executive officer Ignacio Dominguez was quoted as saying by CNBC-TV 18. "As the agricultural season in Latin America and India begins, inventory will also deplete," he added.
The company also said the quarter under review continued to see a decline in crop prices, which also dented demand for agrochemicals. Early purchases were also witnessed during the quarter due to product availability concerns and supply shortages.
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