Fundamental analysis is crucial for making informed investment decisions in the vibrant world of finance. Today, we take a deep dive into the financial health of UPL, examining key metrics such as sales, net profit, operating profit margin, and more.
Table of Contents
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Sales, Net Profit & Operating Profit
UPL has exhibited a mixed performance over the years. Starting with a net profit of Rs 2,030.00 Crores in March 2018 and sales of Rs 17,378.00 Crores, the figures have seen significant fluctuations. By March 2023, the net profit turned negative at Rs -1,878.00 Crores, with sales reaching Rs 53,576.00 Crores. The prediction for March 2025 suggests a further decline in net profit to Rs -2,673.32 Crores, while sales are expected to increase to Rs 48,278.26 Crores.
Operating Profit Margin (OPM)
The operating profit margin of UPL has been inconsistent. In March 2018, the OPM was 19.63%, which slightly declined to 17.46% in March 2019. Despite a rise to 21.58% in March 2021, the predicted OPM for March 2025 is around 9.16%, indicating potential challenges in maintaining profitability.
Earnings Per Share (EPS)
Earnings per share have shown a downward trend. From Rs 26.51 in March 2018, EPS saw a peak at Rs 47.46 in March 2022. However, future projections are bleak, with EPS expected to drop to Rs -23.00 by March 2025.
Return on Equity (ROE)
ROE measures financial performance by dividing net income by shareholders’ equity. UPL’s ROE started strong at 22.14% in March 2018 but has been on a declining trend, projected to be at -8.42% by March 2025. This decrease indicates potential issues in generating profit from shareholders’ investments.
Asset Distribution
UPL’s asset distribution is diversified, with fixed assets making up the largest portion at Rs 43,371.00 Crores, followed by CWIP at Rs 40,915.00 Crores. Investments and other assets are Rs 2,154.00 Crores and Rs 1,106.00 Crores, respectively.
Liability Distribution
The liability distribution shows borrowings as the largest component at Rs 27,643.00 Crores, followed by other liabilities at Rs 29,999.00 Crores. Equity capital and reserves are relatively smaller, standing at Rs 150.00 Crores and Rs 29,754.00 Crores, respectively.
FAQs
What is the predicted net profit for UPL in March 2025?
How has the operating profit margin (OPM) changed over the years, and what is the forecast for 2025?
What is the expected earnings per share (EPS) for March 2025, and why is it significant?
What constitutes the largest component of UPL’s asset distribution?
How much are the borrowings in the liability distribution, and what does it imply?
What is the return on equity (ROE) projected for March 2025, and what does it suggest about the company’s performance?
Has UPL shown consistent growth in sales and net profit, and what are the future projections?
5 Strong Points:
- Sales Growth: UPL has demonstrated a significant increase in sales over the years, reaching Rs 53,576.00 Crores by March 2023, and is projected to maintain this growth.
- Diverse Asset Base: The company has a diversified asset distribution, with substantial investments in fixed assets and CWIP, ensuring long-term operational capabilities.
- Historical Profitability: Despite recent challenges, UPL has had periods of strong profitability, with a peak OPM of 21.58% in March 2021.
- Market Presence: Consistent sales growth indicates a strong market presence and demand for UPL’s products.
- Operational Capacity: Significant investment in fixed assets suggests robust operational infrastructure and capacity for future growth.
5 Weak Points:
- Declining Net Profit: The net profit has seen a downward trend, turning negative in recent years and projected to further decline by March 2025.
- Falling EPS: Earnings per share have dropped significantly, indicating challenges in profitability and returns to shareholders.
- Decreasing ROE: Return on equity has been declining, suggesting inefficiencies in generating profit from shareholders’ investments.
- High Borrowings: The liability distribution shows high levels of borrowings, indicating reliance on debt, which could affect financial stability.
- Volatile OPM: The operating profit margin has been inconsistent, with a predicted drop to 9.16% by March 2025, highlighting potential profitability issues.
Now checkout the stock price of UPL starting from the period 2018 to till Date:
Conclusion
UPL’s financial analysis reveals a challenging landscape ahead. Despite consistent sales growth, the declining net profit, EPS, and ROE suggest potential operational and profitability issues. The asset and liability distributions highlight significant investments in fixed assets and substantial borrowings, which may impact future financial stability.
By understanding these financial metrics, investors and stakeholders can make informed decisions. Despite UPL’s strong sales growth, the financial challenges highlighted in the analysis suggest careful consideration for future investments.
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