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EconomyCompanies

UPL profit falls 24%, Escorts Kubota's 21% as results day turns sour for farm stocks

The crop protection company and the tractor maker both reported lower September-quarter profits on Monday afternoon, with ITC's numbers still to come.

From the editorial desk · MumbaiPublished
Jai Shroff, chairman and group CEO of UPL (file photo)
Jai Shroff, chairman and group CEO of UPL (file photo)Photo: World Economic Forum / Wikimedia Commons, CC BY 3.0

Key points

  1. UPL's consolidated net profit fell 24% to ₹421 crore from ₹553 crore a year earlier.
  2. Escorts Kubota's consolidated profit dropped 21.35% to ₹250 crore even as income rose 15%.
  3. ITC, expected by analysts to post a profit fall of 8% to 11%, is yet to report.

Two companies that sell to India’s farmers, UPL and Escorts Kubota, reported lower profits on Monday afternoon, adding a weak note to a day on which strong numbers from Reliance Industries had lifted the market.

UPL, the Mumbai-based maker of crop protection chemicals and seeds, said its consolidated net profit fell 24% to ₹421 crore in the September quarter, against ₹553 crore a year earlier. Revenue from operations slipped 1.32% to ₹11,860 crore. The company did not immediately break down where the pressure came from. UPL is led by its chairman and group CEO, Jai Shroff.

About a quarter of an hour later, tractor and construction equipment maker Escorts Kubota reported a 21.35% drop in consolidated net profit to ₹250 crore, from ₹318.16 crore a year ago. The decline came despite a 15% rise in income to ₹3,367 crore, a sign that costs rose faster than sales over the quarter.

The two sets of numbers arrived while the wider market was holding on to part of its morning rally. At 1:37 pm the Sensex was up about 576 points at 75,035.42, well below its early high, as information technology shares pulled the indices back.

ITC still to come

The day’s biggest remaining result is from ITC, the cigarettes-to-hotels group. Analysts expect its profit to fall 8% to 11% from a year earlier, to between ₹4,550 crore and ₹4,700 crore, against ₹5,126 crore in the same quarter last year. ITC shares traded 0.40% lower at ₹264.55 shortly before 1 pm as investors waited for the numbers.

Marico and National Aluminium are also among the companies due to report on Monday.