UPL Ltd (NSE: UPL) Q4 2025 Earnings Call dated May. 12, 2025
Corporate Participants:
Unidentified Speaker
Anurag Gupta — Head of Investor Relations
Jai Shroff — Chairman and Group CEO
Anand Vora — Global CFO
Mike Frank — CEO of UPL Corporation
Ashish Dobhal — CEO of UPL SAS
Bhupen Dubey — CEO of Advanta Enterprises
Raj Tiwari — CEO of Superform
Bikash Prasad — Appointed CFO
Analysts:
Unidentified Participant
Somaiah Valliyappan — Analyst
S. Ramesh — Analyst
Abhijit Akela — Analyst
Saurabh Jain — Analyst
Tarang Agrawal — Analyst
Presentation:
Anurag Gupta — Head of Investor Relations
Good evening everyone. I am Anuragupta, Head of Investor Relations at UPL. On behalf of the UPL management team, I welcome you all to 2025 Capital Markets Day. Whether you are in the room here or joining us live through the webcast, I believe the time spent with us today will be valuable in understanding the strategic direction of the company. You will get a chance to hear from and interact with our business leaders of various platforms. The ones who build the systems and engage in working towards our ambition to change the game. A few of these examples you might have already seen at the Experience center created outside. Before we begin, please note that we will be sharing a lot of information in today’s presentation and we would like.
To make sure that you hear it. All before we begin with the Q and A. The session will start with a presentation by Jaishroff, Chairman and Group CEO followed. By Anand Vora, Global CFO Mike Frank. CEO of UPL Corporation, our global crop protection platform. Ashish Dobhal, CEO of uplsas, our India crop protection platform. We’ll have Sujay Sarkar instead of Bhupin Dubey. Sujay is the CFO of Advanta Enterprises, our Seeds platform. And that will be followed by Raj Tiwari, CEO of Superform, our newly branded specialty chemistries platform which was formerly known as UPL Specialty Chemicals. Finally, please make sure to check out the safe harbor note on the forward looking statements. So with that please silence your phones. Sit back and we start the presentation. Let’s welcome on stage our Chairman and Group CEO Jai Shroff. Jai, over to you.
Jai Shroff — Chairman and Group CEO
You just need to. Yeah, just the green button. Thank you Anurag. Before we start, I want to just congratulate our Prime Minister and the Armed forces for the fantastic achievement over the last week on protecting and giving us confidence that the country is in good hands. I want to start off by congratulating the whole UPL team on fantastic achievement. We had a challenging year, the whole industry had a challenging year last year and very happy to inform you all and share the excellent performance of the UPL group today. According to our guidance and the overall performance, we have had the upper end of almost every guidance we had given.
We’ve had 8% growth in revenue, a 47% growth in EBITDA. The free cash flow generation has been more than $530 million. What I can say is that UPL presence across 130, 140 countries gives us a great resilience. Having access to farmers around the world in almost every crop value chain gives us an opportunity for our whole platform to exceed performance. Today you’ll be happy to know that we have delivered better growth, better performance than any other player in our industry in a revival zone. With our presence in 140 countries and the fifth largest player in the world having no single customer more than 3% or the top percentage of our customers are no more than 3% of our revenue today we have built a very deep relationship in key markets such as Brazil, South Africa, Central America and Mexico.
India with our platforms such as our Origio platform Sinova and our partnerships in South Africa. Even in India, with our nurture platform, our customer focus and R and D with a huge innovative pipeline has given us the ability to revive our business. We are completely focused on pain points and addressing the challenges being faced by farmers around the world. Whether it’s food safety, crop residue, whether it’s climate change, whether it is stress due to climate change, water use, efficiency, etc. And we have a huge R and D team which is constantly innovating and filing IP.
Today we have more than 2,700 patents and more than 30% are IP protected. We have an innovation pipeline which last year gave us revenues in excess of $100 million and ongoing. We continue to expect that to continue to grow. Our innovation rate today is about 14% and our strong innovation index on seed platform two is giving us tremendous tailwinds in India and other markets where food and food security is a big issue. Today almost our our platform 38% of our products are differentiated and sustainable. And in Advanta we have a pipeline of 900 hybrid seeds in over 40 crops.
Today we are ranked number one on ESG and we are well aware of how important that is. Today. ESG is a strategic asset of UPL where we not only are becoming much more sustainable, but that is actually a strategic advantage from us because everything we do in ESG is improving the quality of our manufacturing, our product pipeline and also the farmer resilience. We have complete backward integration and this is helping us. And this year is one of the best examples where we are able to recover and rebuild our profitability in a very difficult environment in the world.
We have 43 manufacturing locations and we continue to invest in improving productivity and our cost position constantly to be able to compete in a really challenging environment. Our low cost base and our closeness to farmers around the world and having established a very strong brand among farmers starting from Japan to Argentina, US to Australia, helps us to build a trustful relationships when we are introducing new technologies. As far as governance is concerned, you all know we’ve created four platforms and each of these platforms we have the top class investors, best investors in the world, on the board and representing making sure that the governance is at the highest standards.
Today we are our business, we are focused on farmer resilience. Farmer resilience is one of the key tools for our success and our focus is around understanding the challenges and pain points of farmers and introducing technologies for that. Reducing environmental footprint in agriculture is one of the key requirements of the world and to decarbonize the world. Food security is also a huge challenge. With more than a billion people still hungry in the world, enhancing sustainability and improving our carbon footprint in manufacturing, this is also one of the key challenges and UPL leads the way in that area.
We in every market we operate today, we are involved in a social change and supporting the social project. So each of our businesses is involved in community service. Today we have had improvements on every parameter and long term in next 10, 15 years we expect to be world leader on every aspect as we are today. As you can see, we are rated highly among all the indexes on sustainability. Our commitment is to continue to improve business productivity, enhance business efficiencies and continue to grow with our differentiated and sustainable products and using our existing network and distribution capabilities.
We believe that our financial performance and our ratings, our ROC and ROE both will continue to improve going forward. I hand over to Anand Bora. Thank you.
Anand Vora — Global CFO
Thank you, Jay. Good evening and a very warm welcome. To all of you who have joined us today, both in person as well as those who have joined us virtually a year back, when we had met here at the same venue, we had made certain commitments. We had just come out of FY24, which you all know was the most challenging year in recent times, not just for upl, but for the entire agrochemical industry. But we saw in this an opportunity, an opportunity to right size our organization, to adapt to the market realities, to make ourselves future ready by leveraging on our fundamental, what we call our core, our resilient core as we call it, and which Jay enumerated in detail a short while back.
While we were able to navigate through FY24, we bounced back strongly in FY25, which we call the year of Recovery. The business performance showed strong improvement, especially in the second half of the year. And we are pleased to have met and delivered on all the three financial guidelines, the revenue guideline, the EBITDA guideline and the operating free cash flow. Some of the key highlights before we dive deep into the financial performance, let me summarize them for you. To begin with our superior business performance recovery that we spoke earlier. This was through strong revenue growth driven by industry leading volumes, volume growth of 13%.
We saw growth across all the regions and across all platforms. The Global Crop Protection platform, the India Crop Protection platform, our Seeds platform, the Advantage Seeds and our newly carved out specialty chemistry platform Superform. As highlighted by Jay earlier, our EBITDA jumped by. Sorry, Our EBITDA jumped by 47% and EBITDA margins at 17.4% improved by 460%, an impressive recovery. The improvement in margins were driven by better product mix, rebate normalization and lower cost of goods and supported by productivity enhancement through optimization of overheads. As regards working capital and debt reduction during the year we saw a significant working capital improvement.
Our working capital days reduced from 86 days in FY24 to 53 days, a reduction of 33 days resulting in a release of Rupees 33.7 billion. This was driven by significant reduction in inventories, improved collection against receivables through tighter credit controls. The reduction in working Capital and the Two Capital transaction facilitated the reduction in net debt by Rupees 83.2 billion, almost US Dollar 1.04 billion. Our net debt by the end of financial year stood at 138.6 billion rupees or US dollar 1.6 billion. Now let me brief you on the two capital transactions which we just concluded.
By the end of this financial year. The rights issue of rupees 33.8 billion. This issue was a success. We got over subscription almost two times as stated in the last quarter earning calls. The allotment money of rupees 8.44 billion was received in December 202024 while the amount pertaining to the first call was received by the end of the month. By the end of the financial year in March, the balance 50% we intend to call sometime during this financial year could be within the first half of this financial year. The second capital raised transaction was through the partial monetization of Advantage shares.
We signed a definitive agreement with Alphawave Global for a sale of 12.5% stake for a sum of rupees 30.4 billion approximately 350 million dollars through a mix of primary and secondary transactions valuing our seed business at 2.8 billion. I repeat, the seed business was valued at US$2.8 billion. This marked the second investment in the enterprise by a global investor within a span of two years post the clearance from the Competition Commission of India. We received the proceeds in March just before the close of the financial year. The impact of these two inflows is reflected in our cash balance as of 31st March.
Now let me take you through the financial highlights for the fourth quarter followed by that for the full financial year. Revenue for this financial year for the fourth quarter stood at 155.7 billion, a strong 11% growth over that of last year. This was almost entirely led by volume growth. While the pricing and currency changes largely offset each other. The growth was across all the platforms. The Contribution for the fourth quarter stood at 59.3 billion, a 43% growth over last year. The contribution margins stood at 38% 870 basis point jump over that of the last year reflecting a strong recovery.
The significant growth was driven by better product mix, overall improvements in cost of goods sold and normalization of rebates similar to what we saw in Q3 earlier. During this year SGNs spend was rupees 26.9 billion compared to rupees 22.1 billion last year, an increase of 22%. This was partly due to bonus provision on the back of improved performance in financial year 25. Further, we had some impact of distributor delinquencies in Argentina where two distributors filed for insolvency adjusting for these changes. Bonus not being there in the previous year due to a poor performance as you are all aware about and the normal distributor and I would say the abnormal distributor insolvency being exceptional in nature if we were to adjust for this.
The SGA for the quarter were up only by 4%. The EBITDA for quarter four stood at rupees 32.4 billion, a strong 68% increase versus that of the previous year. The EBITDA margins were 20.8%, an increase of more than 700 basis points, again reflecting a good recovery on the back of improvement in contribution margins. Profit after tax adjusted for exceptional items, associate income and minority stood at Rupees 9 billion as compared to Rupees 0.4 billion in the previous year. Let me share some of the key components leading to this strong net profit for this quarter. We had a healthy EBITDA of rupees 32.4 billion against rupees 19.3 billion in the previous quarter.
In the previous year same quarter depreciation and amortization at rupees 7 billion which was lowered by 11%. Foreign exchange losses at 840 million rupees, a sharp reduction from rupees 2.47 billion in Q4 in the previous year. The reduction in foreign exchange losses were due to lower charge in Brazil Turkey and an appreciation in the Russian ruble Income tax was higher at the back of better performance at Rupees 3 billion compared to Rupees 1.1 billion in Q4 of the previous year. Exceptional charge stood at 2.8 billion, largely attributed to a VAT provision in Brazil pertaining to previous years.
The company along with some of the industry players are looking at challenging this charge and associate companies and JVs. We had a charge of 270 million largely on account of losses from Sinova and Origio, the two Brazilian associate companies. Moving on to financial performance for the full year, revenue stood at 466.4 billion, up 8% year on year and it was at an upper end of the guidance. The strong performance was driven by volumes which were up by 13%, partly offset by price reduction of 3% and an exchange impact of 2%. Contribution at 181.7 billion rupees was up year on year by 21% due to favorable product mix, cost of goods improvement and rebate normalization.
Contribution margins were back to 39%, an improvement of 420 basis point over that of the last year reflecting a strong recovery. Fixed overheads at rupees 100.5 billion were up by 6% mainly due to increase in overheads in fourth quarter. As I just mentioned adjusting for employee bonuses and one time charge due to Delinquencies in Latin America we saw actually a 1% reduction in our SGA for the full financial year over that of the previous year. The EBITDA for the full year stood at 81.2 billion 47% growth over last year, marginally below the stated guidance of 50% growth.
The EBITDA performance driven by higher contribution overall productivity enhancement led by overhead reduction initiatives. EBITDA margins at 17.4% were up by 460 basis points over that of the previous year. Profit after tax for the year at Rupees 9 billion almost entirely coming in quarter four. Some of the key components leading to annual profits for the full financial years are EBITDA of rupees 81.24 billion against rupees 55.15 billion of the previous year. Depreciation and finance costs were similar to that of the previous year. Foreign exchange losses stood at 710 million rupees as compared to 1.29 billion in the previous year.
The reduction in exchange losses was due to lower charge from Latin America and small gains from Russia. Exceptional Items stood at 4.08 billion versus 2.5 billion of previous year. The increase again coming in quarter coming entirely in quarter four. As explained earlier, losses from associated income associated entities stood at 4.72 billion versus 2.4 billion of the previous year. Again the increase largely coming attributed to the Q4 losses from the Brazilian associates. Moving on to working capital, I’m pleased to share that our net working capital as of March 31 was rupees 67.6 billion, a significant reduction of rupees 33.7 billion against that of the previous year.
The positive development achieved through continuous focus on inventory management, improved collections of receivables through tighter credit controls. As already mentioned earlier in number of days, net Working capital at 53 days showed a reduction of 33 days. Inventories stood at 81 days showed a reduction of 27 days while payables stood at 130 days, a reduction of 16 days. The receivables at 102 days were lower by 22 days. Non recourse factoring something which is referred to every now and then was at similar levels as that of the previous year. In other words, we have not increased non recourse factoring to increase our cash flow as has been often spoken about in the previous years.
Moving on to the slide on debt, Gross debt reduced by rupees 47.2 billion approximately 635 million US dollars on a year on year basis to rupees 237.1 billion, that’s US dollar 2.77 billion. We prepaid 250 million long term loan which was maturing in September of 2025 and the balance reduction came from working capital reduction, cash and bank balance as of 31st March was Rupees 98.6 billion, approximately US Dollar 1.15 billion versus Rupees 62.6 billion. That’s US Dollar 7.51 billion in previous year largely attributed to the two capital transactions which is the rights issue and the advantage sales share which as I mentioned earlier the proceeds from both these were largely coming towards the end of the financial year.
The net Debt as of 31st March 2025 was Rupees 138.6 billion US dollar 1.62 billion, a sharp reduction of 83.3 billion rupees. That’s approximately US dollar 1.04 billion. On the back of good operating performance and sharp reduction in working capital, the operating cash flow of Rupees 44.51 billion approximately US$530 million exceeded our guidance of free cash flow of US$300 400 million which we had guided at the beginning of the year. The net Debt as of 31st of March 2025 was rupees 138.6 billion. US dollar approximately US dollar 1.62 billion, a sharp reduction of 83.3 billion rupees or US dollar 1.04 billion.
Our net debt to EBITDA ratio stood at 1.7 times EBITDA, a significant reduction versus 4 which was there at the last financial year. To sum up we delivered strong FY20. FY20 to sum up we delivered a strong FY25 with all the key indicators close to or beating the stated guidance. Our revenue growth of 8% is on the higher side of the stated target. Our ebitda growth was 47%. Despite the tough macro indicators as well as a strong operating cash flow which will be used to fuel growth in FY26 and assist in debt reduction. Before I call on the platform CEOs to take you through the business performance in details, let me summarize the financial results.
Our core resilient core facilitated a quick turnaround and we delivered best in class industry wide financial results, delivering revenue growth at the top end of our guidance. EBITDA growth close to the guidance and outperforming on the operating free cash flows. With this I hand over to Mike to take us through the business performance of the global crop protection business. Thank you.
Mike Frank — CEO of UPL Corporation
All right, thank you Anand. And hello everyone. Good to see many familiar faces in the room today. Over the next few minutes, I’ll take you through our global crop protection business and talk about our FY25 results, our outlook for FY26, and then also discuss our very exciting R and D pipeline and what we see coming in the short term and over the next few years. But before we look at the key highlights in FY25, I’d like to share my thoughts on the global crop protection market. As you know, looking back over the past 24 months, FY24 was a year where the global ag industry and our business were impacted in an unprecedented way and on multiple fronts.
In that year, starting in 2023, it was our read that the market structure changed and that overcapacity from China was a new reality. Based on this, we made the necessary adjustments that we thought were needed, including downsizing the organization, making the needed adjustments with our customer rebates and returns, trimming our low margin portfolio, and making other adjustments, all in an effort to rebuild and reset. And as you will see in our performance in FY25, these tough actions that we took a year and a half ago have paid off. In FY25, we saw the macro global crop protection market start a gradual rebound.
However, our performance significantly outpaced the industry. Farmers and dealers. Their buying patterns are now reset. We believe channel destocking is complete in most major markets and we see normalized ordering patterns from both growers and the farmers, although they continue to order closer and closer to the use season. Further. Active ingredient prices are stabilizing at the current level. Looking ahead, the operational excellence focus that we put on working capital, customer engagement and supply chain efficiency will all continue to drive our momentum in FY26 and beyond. As a business, we remain vigilant and resilient, adapting to new challenges, opportunities when they emerge, and market volatility which is the norm for today. Most importantly, we’ve built a strong foundation to ensure sustainable growth and profitability. So, turning to our key highlights, in FY25, we improved the quality of our business, outpacing peers and volume growth and achieving higher penetration in key markets, demonstrating continued customer confidence and acceptance of our offerings.
This resulted in strong revenue and EBITDA growth, as we will see later in the presentation. And as mentioned by Anand earlier, I am pleased to highlight that our focus on operational excellence has positively impacted working capital, specifically through inventory optimization, tighter credit controls and reducing receivable terms the success that we had with our working capital this financial year has resulted in us outperforming our full year free cash flow guidance at the group level, setting us up well for a future with a strong balance sheet. Moreover, we made significant improvements in our process efficiencies resulting in a big reduction in net working capital days, effectively setting a new industry standard focusing on marketing excellence.
This year we launched several new products generating over $93 million in sales representing about 2% of our total revenue. This demonstrates our commitment to grow our business through innovation and unique product offerings. On the organizational front, our employee engagement was high reflecting an organization culture in which our high performing teams have a strong sense of purpose and commitment as a business. We demonstrated resilience and agility in building a strong foundation for a future ready business. So let’s turn to our quarterly performance. Our fourth quarter results show a strong bounce back. I am pleased to share that our fourth quarter revenue was up 18% versus last year.
This growth was led by higher volume growth across the key regions such as North America and Europe, demonstrating our resilience and rapid recovery from last year’s challenges in these markets. Among major segments we saw significant volume led growth in both herbicides and fungicides. Herbicide growth benefited not only from rebate normalization versus the previous year, mainly in North America, but also from robust volume growth in Brazil and Europe, especially from strong in season demand for key products such as clethidim. Fungicide growth was primarily driven by MANCOSEB volumes in Brazil and North America as well as CAPTAIN volumes in Europe.
Our insecticide portfolio in the fourth quarter was impacted by lower acephate volumes in Brazil, which was also compounded by pricing challenges for acephate products in this market. But strong revenue growth in our NPP business, which is our natural plant protection portfolio, was driven by a mix of improved pricing as well as biostimulant volume growth, specifically in Europe. I am pleased to highlight that our contribution margin for the fourth quarter has shown a remarkable turnaround, growing 900 basis points versus last year, demonstrating our ability to earn margins in this current environment. Overall margin improvement was a result of improved product mix mainly in our differentiated and sustainable segment cogs improvement and normalization of revaluation primarily in North America.
Our differentiated and sustainable products grew volumes by 23% versus last year led by insect control brands like Bright in Brazil. Post patent segment margin recovery was led by significant growth of Captan in Europe and Mancozeb in Brazil. We’re very encouraged by this trend and the continued strong adoption of our products by customers. Turning to sga, we continue our strong discipline around discretionary spend, but unfortunately we did face, as Anand said, a few headwinds with our chapter 11s that we experienced with customers in both Argentina and Brazil. But Overall the strong fourth quarter performance resulted in EBITDA margin improvement of over 1000 basis points.
Looking here at our regional performance for the quarter, overall growth in our LATAM region was impacted by market erosion, specifically in Argentina, lower insecticide volumes in Brazil coupled with the impact of currency volatility and continued price pressure. In the LATAM region, Brazil volume was led by Mancozeb as well as acephate based solo and mixture products demonstrating our continued ability to consolidate our market share. In North America we continue to experience strong in season demand for our products with channel inventories as well as rebates back to normal levels. As I mentioned earlier, the region had a robust 64% volume growth supported by a strong herbicide portfolio with products such as Clethodom and Esmetulachlor and Metribuzin all performing very well.
Overall, the region grew by 84% in revenue versus last year. In Europe revenue was up 25% boosted by favorable weather conditions and driven by strong volumes and fungicides such as proxenil captan volumes and strong growth in our biocontrol and biostimulant product line. The rest of the world comprising of Asia Pacific and Africa recorded 3% led growth and overall revenue growth. So in full year FY25 we posted 11% revenue growth versus last year driven by industry leading volume growth and a strong herbicide led performance. Contribution margins grew by 640 basis points to 32.5% versus last year.
Turning to SGA, the full year impact of Chapter 11s in the LATAM region was around $14 million leading to a slight increase of 3% overall in SGA versus last year. Excluding this impact though, our SGA would be lower on a year over year basis. Focusing now on our strong ebitda growth of 141%. This was driven by improved mix, lower cogs, higher contribution margin and again disciplined control of our discretionary spend. Moving to our regional performance for the full year, North America and Europe recorded impressive volume led revenue growth at 67% and 19% in each region respectively.
Volumes in Latam grew at 15%. However, in spite of pricing pressure, currency volatility challenge and a depressed market in Argentina, the region closed slightly up on revenue growth year over year. The rest of the world, specifically Africa and Asia Pacific geography posted 1% revenue growth driven by 4% volume growth which overcame headwinds from currency and a little bit from pricing. Turning to the performance of our differentiated and sustainable segment, I’d like to highlight that this segment continues its strong trajectory. Volumes in the Segment grew by 21% partly offset by currency headwinds resulting in 11% revenue growth versus last year.
LED by acephate based Furose as well as acetamipride based Bright in Brazil, this segment volume growth rate continues to outpace the post patent segment with much higher product margins. This volume and revenue growth we have improved our overall mix of differentiated and sustainable products to 38% this year versus 35% last year and we remain on our path to achieve a 45 to 50% differentiated and sustainable mix by FY27. Our focus on innovation and solving farmer pain points as Jay talked about is demonstrated by strong revenue growth from our new products. As I mentioned earlier, these new products delivered over 2% of our total revenue at $93 million, outperforming our $85 million target that we set at the beginning of the year.
Moreover, most of our product launches were from the differentiated and sustainable segment which helped improve our overall margins. So, moving on to our FY26 outlook, we continue to see robust and strong farmgate demand for our products and technologies. However, we do expect the headwinds related to low ag commodity prices to persist resulting in flat to slightly lower profitability for farmers. With purchase patterns continuing to shift closer to the use season. While the macro challenges persist, we will continue to accelerate our sales mix towards differentiated and sustainable solutions which is at the core of our growth strategy.
Our success with working capital management this past year resulted in low inventory at the start of this year giving us the benefit of starting with fresh stocks. Further key active ingredient prices have now stabilized and we anticipate flat to slightly lower costs on internally sourced active ingredients as we go into FY26. On the geopolitical front, the current US tariff policy as it exists today is beneficial to our India based manufacturing products. Manufactured Products with the planting season underway right now in the us, much of the needed products for this season are already onshore in the US so we don’t anticipate much impact from tariffs in our first half.
That said, we have already adjusted some of our in season pricing on some of our products to cover any additional tariffs which will be impacted by fresh imports into North America into the US Specifically on the supply chain front, we remain agile and flexible ready to adapt to this ever changing environment. Turning to our FY26 operational strategy, our revised business model and strong momentum is set to deliver against this challenging backdrop and our approach to profitable growth this year is a multi pronged strategy through three key areas. Firstly, driving operational excellence with purpose to deliver best in class customer outcomes.
Secondly, disciplined resource allocation and portfolio management, delivering both contribution and EBITDA margin expansion and finally creating organizational efficiencies by continuing to transform our target operating model to enable more efficient scalable growth. Our FY25 success has given us clear momentum and we’ll use this to compete profitably and deliver our FY26 EBITDA and cash flow commitments. We will continue to focus on improving the quality of our business, focusing on margins and volume growth, New product launches and implementing our retailer and distributor approach which focuses on more on sell out than sell in will continue to be a key focus of ours.
We have set an ambitious target in FY26 for new product launches of over $130 million in new revenue from new products that will launch this year. We have over 20 new products that will be launching across all regions this year, but the bulk of the new product launch revenue will come from North America, Latin America and Europe and these new products cut across all segments fungicides, herbicides, insecticides and our NPP portfolio, but they’re primarily in the differentiated and sustainable segment. Our attention on cash generation still remains a priority and our past year’s best in class working capital management puts us in a unique position to both grow and generate free cash.
The natural plant protection business had strong growth last year and margins in this business continue to be robust. We remain focused on our ambition to grow faster than the market in our sustainable solutions segment with an expected CAGR of roughly 13% between FY25 FY30. This segment comprises biologicals, biocontrols and biostimulants and it’s a very important growth driver as we look forward. Most importantly, these products help our farmer customers improve soil quality, increase plant health, reduce their carbon footprint and bring more resilience to their operations. Looking ahead, we have 10 new technologies in our natural plant protection development pipeline and we’re on track to deliver our commitment of $700 million of revenue in this segment by FY27.
As a reminder, our crop protection and sustainable solutions pipeline is built around customer centricity and a balance between traditional crop protection products and bio solutions. Our current pipeline value is approximately $4.3 billion at peak sales, of which around 1.5 billion annual sales is expected by FY30. I would like to emphasize that we have 26 molecules in our development pipeline with several new entrants since our last Capital Markets day event and 17 new solutions platforms. So in summary, FY25 was a year where our global crop protection business performed very well in a challenging market environment. Our focus on operational excellence proved our resilient core and while the macro environment in FY26 continues to be challenging, we see a path to deliver another year of strong revenue and EBITDA growth, showing that we are future ready.
Finally, I’d like to thank our team for their dedicated efforts and our valuable channel partners around the world for driving forward together with strong purpose. Thank you. With that I’ll call Ashish to talk about UPL sas.
Ashish Dobhal — CEO of UPL SAS
Thank you so much. Mike. Good afternoon everybody. A warm welcome to you for our Capital Market Day. A quick thing on the India business. I think the year gone by was a very, very important business for us. It was very important. It was a pivotal year for us because we didn’t just recover from a very unfavorable place, but we actually rebuilt the business in this year with a lot of intent, with a lot of discipline and with a future looking lens. Today as we stand here, we have a much more resilient core which is financially very, very strong, commercially very, very sharper and operationally very, very leaner.
And we just don’t stop at this as we go forward. We are future ready where our ambition to grow is very high, but not just in terms of quantity, in terms of quality. Also in the next few slides I’ll take you through how this transformation was done, but more importantly, why it is built to last. FY25 key highlights for UPL essays We’ve transformed to drive sustainable growth three big pillars. One was operational excellence where we have redrawn the contracts with most of our customers because we were looking at very prudent credit policies and working capital usage.
Almost 9,000 customers. The contracts were renegotiated, the placement was aligned very close to the season and the forecasting was done very, very dynamically. We went aggressive to reduce sgna, but at the same time we increased the spend on training because it was very important to drive this transformation and execute it not just at the employee level, but also at the channel level. Market and Channel optimization Last year in the Capital Markets Day we did promise everybody that besides our traditional crops of cotton, soybean, ground nutrients, we’ll be focusing big time on corn, sugar cane and rice.
And that’s where a big chunk of our growth also comes. This Year I’m very, very happy to say that we have aligned a go to market strategy not all over India but with the very selected evolving demand pockets which were, you know which were actually selected based on intense analytics that we did on a lot of micro markets. In terms of strategic portfolio we went heavy on cutting down on products where the margins were very less. Herbicides overall India is increasing and we are leading this evolution in India where because of the labor shortage in every single crop herbicide segment is increasing.
We have one of the biggest non selective products in India with Sweep Power and Ferio our herbicides in soybean. Are we. We are in pre post and early post segment. The interesting piece was the resurgence of the legacy brand. So Saf Sati and Lancer Gold are household brands in India. In the rural areas these brands are 10 to 12 years old. We were able to grow all these brands not just in volumes but also in margins which brought us to this quarter four it was one of our strongest quarters. The big jump in revenue was basically on volumes, on liquidations in the Rabi season.
Majorly in sugarcane pulses. We are the leading company in pulses and South Paddy. The key crops are all high margin. The key products are all high margin products for us. Iris Patella is mainly on pulses. We have Sathi on paddy and electron cascade on sugarcane. EBITDA was mainly driven by a higher contribution which was partly offset by by some A and P spends that we had to do at the end of the year for a lot of new launches and cash flow from operations there was a significant, significant improvement. Inventory levels were brought down big time as compared to last year and which also led to a major reduction in the working capital which brought us to these results of a revenue increase by 57% in Q4 from 4.3 billion rupees to 6.8 billion rupees.
A contribution margin improvement from 5.7 to 27.8% EBITDA of last year minus 0.4 billion rupees to 0.9 billion rupees. So we’ve come back to some of the numbers in the fourth quarter which are our historical best for the full year. To tell you the story, we did exceedingly well in the herbicide segment. Centurion Canora today is the hottest product in soybean. Iris Patela is a leading product in soybean. Sweet Power. Ferio is a product which is an all India product which goes everywhere. It’s a non selective. We’ve really created this segment and a big chunk of our business this year comes from new product launches and the climate smart portfolio which we also called npp.
We have made massive improvements in US in in share of our strategic crops like corn, rice and sugarcane, which to some extent has, you know, countered the offset which was because of decline in cotton contribution margin primarily led by the portfolio rationalization and new launches and stable input costs. This year EBITDA was driven by improved contribution and overall efforts in the in optimization for leaner and efficient structure and cash flow from the operation once again was historic best for us this year, which in terms of number translates to 32.3 billion rupees from 28.5 billion rupees of last year, which is a 13% growth.
A contribution margin jump from 19.2 to 26.8 for the full year. We also are looking at an EBITDA growth of about 232% from 1.3 billion rupees to 4.4 billion rupees, which is 440 crores and an EBITDA margin of 13.7 against 4.7 of last year. Our digital platform nurture. Very happy to report last year we had at this platform told that we’ll make it CM1 positive. We are CM1 positive. We have a GMV of 220 crore. We have brought down the losses from about 1 point from 1 billion rupees to about 0.9 billion rupees. We are getting partners from across India across categories, not just crop protection, but seeds, farm machinery equipments.
The big chunk that we feel in the digital business, you know, the big improvement that we can, you know, very proudly talk of is the increase in active users. So about 45% increase in active users and the engagement time, which is the time spent on the app, goes up by 60%. These are two very, very important metrics to say that there’s a big habit being forming, formed in the rural areas. We have almost 60 to 70,000 retailers now transacting with the platform for the coming year. What are the priorities? What is the new thing? Well, not too much because we really believe that we’ve taken some big bold measures last year and it’s very important to see through those measures and continue some of the work that we had started last year.
So we continue to keep a very tight control on credit and commercial policies to sustain optimize working capital. The spend, the efficacy of the spend is very important and we are using tech enable efficiencies to figure out that, you know, how do we make sure that we get the maximum bang for our buck in terms of our differentiated portfolio, we are going from 40 to 45% in the current year. That’s a big place where we are focusing on to over to increase overall margins with the new products that we are launching this year, our Climate Smart portfolio or the NPP portfolio.
And the rationalization of the tail continues and we continue to focus on the crops where there is a strong tailwind like corn and sugarcane. Driving ESG is core to us. It’s our heart and soul. Our name itself says UPL Sustainable Agro Solutions. Shashad Mithas is a program for sugarcane where we are giving end to end solutions of sugarcane with the traditional crop protection and climate smart practices and smart water products like Zeba. This product, this, this whole program is adopted today by 16 sugar mills and another 16 sugar mills is something that we are about to sign which would mean almost 80,000 acres of sugarcane under this program.
Our Rice carbon program is at a very interesting stage. It’s in the second year. We’ve seen some amazing benefits of this program. We’ll be able to update you more about this in next six to eight months. Our Pronotiva program which is similar programs for other crops also are underway. Our Grounded program is a very very successful program and we are also planning to take it to other crops. NPP or the Climate Smart products of course is the heart and core and soul of the sustainability in farming in terms of health and safety drive not just for the employees but also for our distributors through some aggressive insurance schemes and very innovative insurance schemes that we’ve given to the farmers and also to our retailers.
So it just not is so it’s not just with the employees and of course with our increased reliance on the digital cyber risk policies is something that we’ll work very very aggressively this year because we are more and more relying on on digital and analytics to take decisions in terms of digital transformation. We are doing it in three steps, three stages. No division is left without it. So Farmerly is a platform, a digital platform for our business channel partners and engagement to to them with them. And Nurture platform is mainly for farmers where, where we are giving host of our services.
Whether it is mechanization, whether it is advisory, whether it is insurance, you know or, or whether it is the traceability. Everything is being being given through nurture farm and two platforms for our own employees. One is distributed 360, you can see it outside. It’s there in the experience center which gives the amazing ability to our employees to actually just have a look at the app and Figure out the quality of the customer he’s working with and accordingly devise incentives or credit to those customers. Swift Squared is a program which is for our third party employees to make sure that, you know, their productivity increases and to make sure that their productivity is tracked digitally.
Add to this the big focus will be a 2 billion revenue from the new launches which is the first year of sales. So we can very confidently say that this year, you know, whatever we’ve done is not a flash in the pan. This is a business which is with a very, very strong core and it is future ready and we are trying to develop a culture where excellence is a habit. Thank you so much. With that I’ll call Bhupin.
Bhupen Dubey — CEO of Advanta Enterprises
Thank you Asis. Please bear with my throat. Not a very good one. I will try to make it better but probably focus more on the numbers. It will make you happy. Just to break a good news. The group UPL is known for the ambition, aggression and global vision. Once you are a part of this group is impossible not to get infected in terms of rank rating. So I keep hearing about our team keep hearing about UPL is now world’s one of top five players. Our team keep thinking about when we will say make this statement and I’m very happy to share with you today that independent company bioinvestors they analyze the data and they say now advantage one of top 10 seed company globally.
So and if I add associated group company where we have investment I put that actually we are number nine. So so now you can keep an eye on one more metrics how the Advantage journey is growing. I do believe that the year is not far when Advanta can also say that advantage one of the top five global seed companies that is the starting point in terms of highlight of the performance. Current year revenue growth is about 12%. As you as you are aware like agrochemical seed industry growth is also 0 to 2% broadly that is as per the published data available.
Light of that background I think 12% growth is very good. Growth could have been better probably 1516 had we got good supplies of seed in H1 EBITDA margin. We try to maintain in sync with top line. We are at 11% and portfolio expansion is happening in more and more crops in more and more segments. And you are aware Anand already indicated with the valuation of advantage to 2.8 billion $. With this we are now most valuable pure play company in the world. And I do believe this this journey will continue going forward. Now in our annual performance I think quarter four contribution is significant normally quarter four contribute to the range of about 25, 26%.
The current year the quarter four contributed to more than 32%. Compared to previous year terms of revenue we grew by 37%. I think this was primarily, you know, huge advanced gas collection came from a key countries like Thailand and in India. Driven by the buoyancy in the. In the. In the corn that that reflected in the demand for corn and that that help us in building this revenue. 38% growth in terms of EBITDA we have growth is about 160% region wise breakup when you look at it in this quarter normally Asia, AMIA, the Middle east and Africa is 41%.
This year is about 45%. Because of the factor I just indicated. Latin America America remain at 33 32. More or less same slightly. The Australia came down from 20% to 18% while Europe remains at 6%. When we look at the global the annual number from the base of 41.5 million rupees we moved to 46.3 billion rupees. It’s about 12% growth and EBITDA growth is about 11%. Terms of source of growth revenue volume about 7% and then price is about 4%. With this we were able to pass on the extra cost of production to to the market.
In terms of contribution by region, more or less the Asia Africa remained 52%. America is about came down from 38% to 35%. Australia remain 11% and Europe is about 2%. Europe as conveyed last time also though is small. 2% was going forward. We believe it’s very, very important Strategically it could be in the range of 15 to 20%. Because of the disturbances in Europe, because of the Russia and Ukraine we have slowed some of our GTM initiatives. But blueprint is ready. As soon as we get the news that more or less the war is ending, ceasefire is announced, we will accelerate our GTM and therefore this journey of 2% has a potential of going up 18 to 20% going forward.
Terms of contribution by the crop Tropical field corn is our main play. We are contributing about 40 growth. The contribution to total revenue second position is a grade and forest sorghum contribution to the Revenue is about 25%. Sunflower canola is 17%. Vegetable and fresh corn is about 13%. Technology brands which are their iGrowth, Ethomax FX, Vertex and Advanta Innovation center are our, you know, GTM platforms and technology platform. I want to draw your attention to the Ethomax, the new new sub segment we created and the branded Is Ethomax in India is actually you are aware the the biggest movement in happening in agriculture is ethanol driven by the the corn consumption.
A huge number of ethanol manufacturing plants have come up as a result. Currently in India the the ethanol manufacturers they have two feedstocks. One is a broken rice from FCI and the corn corn coming directly. Now there’s a competition for this. Both the feedstock the broken rice today in the price available they find manufacturer find they are more profitable for them compared to the corn fed stock. Positive part is that the the corn price in India is 2400 rupees to 2800 rupees per quintel. Farmers are extremely happy and area under corn has gone up dramatically from the base of about 8.5 million hectare to about 11 million hectare.
There’s a possibility of crossing 15 to 60 million hectare. If this virtuous cycle set by the government of India of allowing quant for the manufacturing that continues then there’s a good possibility there. So we wanted to understand the entire value chain. So in the process we realize while fireworks are extremely happy. But the ethanol manufacturer were a little bit of not comfortable. They’re still putting a pressure on government to release broken rice more and more because they were making more margin there. We then analyze the more traits of the corn in the market so far.
Seed companies normally they operate on what are the agronomic trait. The marketing USP are economic trait. Yield is more tolerant against the paste or the disease. Are the USPs. We analyze the how do we really bring it down? The cost of production or yield increase for the eternal manufacturer or the question we we discuss internally. And our R and D team technology development team they came out with the idea let’s analyze all the corn available seed available in the marketplace and see what is the starch content of each one of it. The carbohydrate content of it.
Almost all the player in the market they have carbohydrate content is about 65, 66%. Advanta has the brand the products which has got about 68 to 75%. And this increase in 4 to 5% 6% increase in carbohydrate straight away increase the yield per ton for the manufacturer. So we have now unique positioning whereby farmers makes a lot of money because of our seed give them potentially 8 to 10 ton per hectare which is one of the highest in the industry. Also ethanol manufacturer also gets the highest yield of ethanol per ton of advantage seed gone.
As a result of that, the entire new marketing platform we Created and the branding. We have come out in the marketplace with this platform called Ethomax. That means ethanol in every corn. So every grain of Ethan is advantage corn. If you buy, you get more and more ethanol. So this, this theme has tremendous traction. Now we have created a special team. They are going to the ethanol manufacturing plant along with their team of extension workers, developing a talking points and covering this entire message to all these countries so that there’s a relation happening between seed, Advanta, corn farmers, ethanol manufacturer and the entire complete scene so that we have a strong, close, close loop look, informally kind of thing you are developing.
I do believe that with the success and the initial response, we are getting it. I think this is really going to lead us in terms of accelerated growth of our business. That’s it. Thank you very much.
Raj Tiwari — CEO of Superform
Thank you, Bhupin. Good evening everyone and warm welcome. It gives me immense pleasure to stand in front of you to introduce the newest baby of UPL Group, SuperPharm Chemistries Limited. So I’ll start with safety because for us, for Superform, it’s the chemistry business, the specialty chemicals business. For us, everything starts with safety. We started the safety Transformation journey in April of 2022 with establishment of the framework with the diagnosis and then we started implementing those changes. We identified three themes, Process safety, management, incident investigation and the groundswell in terms of identifying more numbers of near misses.
And that’s where we started building the competency in each of these categories. Then we sustained that and today the journey has completed three years and the result of which has been that we have not only been able to improve on our lagging indicators, but you know, this year we have, you know, we can see our TRFR which is total recordable frequency rate, which matched the best in class in chemical industry around the world, which was at 0.22. So superform is what I call it as I mean it, it came into existence on 1st of December, but the roots goes back 55 years.
We have built many technology platforms or chemistry platforms. The first and the most oldest one where Rajubai started in 1969 was phosphorus. So phosphorus, you know, and the legacy of it. So we are India based, our all assets are based in India and therefore a little bit talk on the specialty chemicals or the chemistry industries outlook here in India and why it is advantageous and in the given context, how does it make a difference? So we ourselves, I mean India itself has a huge market. So you get a home market, whatever you do, you are able to find home for most of your products here in India itself, you have low cost of labor, but low cost of labor doesn’t mean you get a low cost of labor, but which is very highly skilled.
In last three years the cost of energy has really, you know, been competitive. One of the handicap for India was the cost of energy, especially power. In last, you know, two, three years the cost of power, you know, has really came down if you are able to play your cards right. Also as a country we have, we really lagged, you know, the logistics network. Now with the logistics park, the dedicated freight corridor, the national highways, the superhighways that has really improved which can be compared with, you know, some of the, you know, developing, you know, countries.
The cost of capital is quite competitive. But the other very key important thing is about India is, you know, we have very strong IPR regime, you know, our legal system, the courts, we, you know, it can stand, you know, so therefore the western customers are very comfortable having a relationship here in India because IP rights gets protected. And of course in the new geopolitical context, China plus one or we call it, you know, and another source, an alternate source to have a robust supply chain and not a broken one is also extremely important. So being India, which has got a very well established chemical industry is the sweet spot to have this billion dollar kind of what I call it as a startup.
And what’s impacting the Indian chemical industry? Of course import substitution, you know, as the, as India grew, you know, as our consumption grew, we can see that lot of opportunities are there in terms of making those products here in India itself because it is more competitive and you can, you can actually do it at scale sustainable manufacturing, especially with green chemistry and alternative energy being very, very competitive in India, you know, that’s another advantage that’s a key trend. Of course the customers are looking at de risking and therefore India is in a sweet spot and that is how it is being looked at.
Integrated, you know, value chain. And lastly, you know, government support in terms of PLI as a whole industry doesn’t matter whether chemicals as a pharma intermediate or as an AG or as a specialty or as in performance, you know, you know, government is taking right steps in terms of supporting the industry and that’s a good trend. So I’ll take couple of slides to introduce what superform is, what this brand is all about. But before that, can we play the video please? Sam?
That’s, that’s super form. So as you see, you know, I mean, why super form? Actually, you know, this super form is a combination of two words. Depends how do you look at it super and form or super and perform? If I look at outside in view, it’s all about supercharging the future by reshaping the chemistry. Form is in shape, scale, difficulty, whatever. And if I look at inside out view, it’s all about high quality product using high performance culture, high performing team. And that’s what superform, that’s what made it a great brand. And behind the brand of course, you know, I’ll talk about, you know, what was the idea behind the brands, what’s the purpose and what’s our proposition? Our idea behind the brand was very simple.
Using you know, chemistry as a change, you know, chemistry as the chemicals, chemistry, but also as a, as a, as a chemistry of humans, you know, chemistry between us and the customer, you know, chemistry of us and the shareholders, us and the community at large, the place where we operate in, you know, us and the government. So using chemistry as a change, you know, bringing that positive change and therefore change, chemistry, change everything was our idea which also became tagline for our brand. The purpose is to reinvent the chemistry to, you know, as world’s most powerful force for bringing that positive change not only for our customer, but for the community, for the shareholders, for the, you know, employees, for every soul which we touch with.
And the proposition this is coming out of our legacy, our 55 years of history, you know, delivering high performance chemistries at scale. And that’s what we are known at, which creates wonderful impact for the world. Most of our, I mean we have always believed in creating chemistries at scale and that’s what we have been doing for last 50 years. And that became our proposition. So while we restructured this as a standalone business, you know, our idea was that, you know, we have always been, we have always invested heavily in our manufacturing assets to be able to support our ag business.
And that’s how in last 50 years we have been able to grow our AG so aggressively. But now not only ag will ag, our ag business will grow. We’ll continue to invest in ag, but we’ll also start developing and applying chemistries in other applications. Whether it is pharma intermediates or mining chemicals or I mean, you know, application in mining or application in textile application which goes into flame retardants or could be, you know, or is in lubricants. So we are looking at applications where our chemistries has strength and then we, you know, you know, building those technology platforms and having bolt on products and this is where we are going to focus on our new capabilities now.
Since we have created this platform, we are now open to the world wherein we are going to offer our 55 years of capabilities which we have created the not only the tech platforms but also the chemistries to you know, not only in ACT but also outside ag. So these are the applications which I talked about, you know, will, you know, will have an applications. We want to very quickly scale up our specialty chemicals business and so that we can unlock the shareholders value and with the, you know, with us having BON and a separate entity, this will help us bringing not only the operational efficiencies but manage the cost, you know, you know, extremely well to be able to deliver, you know, comparable, you know, sectoral results.
And this is how we are structured. You know, Superfom, you know, currently has 75% of our revenue coming from our AG and NPP business and 25% of our revenue coming from specialty chemicals, animal health and health and nutrition business. Now what is the competitive edge, you know, when we build this platform very clearly, you know, the scale of operations to achieve global competencies, that’s that, you know, clearly stands as the competitive edge. Our 50 years of experience in taming most hazardous and complex chemistries, you know, that has been, you know, another competitive, you know, advantage.
Our, our access to very high quality, you know and competitive feed, you know, feedstock. That’s the competitive, you know, advantage. And not to forget, you know, you know, our backward integration, you know, the downstream applications which we have already created in last few years and in terms of key chemistries, if I talk about, you know, that’s, that’s in last three, four years is what, except for phosphorus is what we have built, you know, the, the phosphorus chemistry’s competency has been built over last 50 years which we are, you know, you know, which will reap the benefit with those bolt on products.
The application wise, you know, if you see the whole flame retardant business, you know, moving away from halogenated to phosphorus based that’s where you know, we get, you know, tailwind in the battery applications, you know, the energy storage applications. In lithium ion battery we get, you know, that’s the trend, you know, emerging and that’s where we are going to be. Remember, you know, upl used to make for good 25, 30 years yellow phosphorus, which is, you know, elemental phosphorus. Now because of competency reasons we stopped manufacturing 15 years back. We want to be there back into it.
The cyanization chemistry’s technology in the platform we built in last three years and that investment we have already done now that Platform being in place now all the signation based bolt on products are coming in. You know whether they find applications in mining or in chelating agents or and many other applications. Our phosgene chemistry platform that also the investment is already done and you know we have built that plant again here also you know our extension of the products where the growth will come from right from you know right from paint to pharma intermediates. You know those products are coming up and mind you these these technology platform are not only complex but they are at world scale.
We have already established this these you know platform at a world scale capacities. The the other chemistries where we have huge competency is the sulfur. The H2S based chemistry where you know, you know we are already there in terms of NA2s and Nash but we are also building other applications which goes into lubricants and goes into pharma applications as well. So what are the highlights? We you know our year on year revenue grew by 6% but our specialty chemicals business grew 24% largely coming out of volume growth. We have, we entered into six binding and non binding agreements last year having you know on the top end side of the potential 2000 crores revenue potential every year.
We launched seven products, specialty chemicals and ag products last year. I know some of you would find Parasu Sulphone not being there because it was already launched the previous year. We reduced our inventory 24% by almost 330 crores last year. So a lot of focus on our working capital management to to ensure free cash. This is a full year number which I’m presenting because we don’t have a comparable quarter number because we came into being only on 1st of December. So for the full year our revenue was more than 10,000 crores with the 6% revenue growth.
Our contribution margin contracted by 200bps because of the product mix and our overheads was largely flat. Our ebitda grew sorry degrew 7% at 11.2 you know percent. I’ve shown the specialty chemicals number separately. At the bottom you can see our specialty chemicals business grew 24% to 1700 crores and EBITDA for the specialty chemicals business grew 16% to 2370 crores. Thank you very much. I invite Anand to take it forward. Thank you.
Anand Vora — Global CFO
Thank you Mike. Thanks. Ashish Bhupin and Raj I think provided a good insight into how the business performed last year and also a peek into the future opportunities that they’re exploring. With this I’ll share the guidance for the next year considering all the macro factors, the geopolitical situation prevailing. I mean every day I guess all of us end up first watching the Twitter and seeing what’s the next thing coming up. So considering all that, we are guiding for a revenue growth in the band of 4 to 8% and an EBITDA growth of about 10 to 14%.
I would like to add here that we expect Q1 and Q2 to be subdued considering all the geopolitical turmoil. However, we remain confident of delivering the above guidance for the full financial year. So with this we will start the Q and A session. I would like to invite the business heads and Mr. Shroff on the stage and we’ll start the Q and A sessions. Give us about 2, 3 minutes to set up the stage. Thank you.
Questions and Answers:
Anand Vora
It. Sam, it’s. I think we can start. Please monitor one or two people. Stand there and watch. Just stand in the back and see. Go ahead.
Somaiah Valliyappan
Yeah. Hello. Yeah, hi sir, this is. I’m Somaya from Avenda Spark. Thanks for the update. A couple of questions. So first thing on the guidance of 4 to 8% for this year, is there any pricing led benefit? We are baking in. That’s first and across geographies, where do we see a higher growth on a relative basis within this 4 to 8% and what would be the reasons for a 1 inch slightly being subdued compared to what we’re expecting later? Thanks.
Mike Frank
So the regions where we would likely see stronger growth than 48% would include North America, Latin America and potentially the rest of the world region. There’s where we see continued strength. I think you need to think about it though in context to the industry. You know, we just saw this past quarter, all of our peers report and for the most part most companies were flat to down on revenue. In fact some companies were down in the double digits. And so the industry continues to be very challenging. Obviously we outperformed that in our fourth quarter. We believe we’ll continue to outperform the industry.
But you know, our expectation is that the industry overall this year will be roughly flat. There’ll be some volume growth and maybe a little bit of price degrowth. And so that’s what we’re expecting and we’re going to outperform it. So that’s where we guided to the 48%.
Somaiah Valliyappan
Understood. Just one follow up. Yeah. So now when we are looking at this current quarter performance generally when I look at the global peers, your peers, I think North America has been a bit of a tough environment for them. Whereas you have done very well In North America, whereas latam they have been able to do relatively better. Is this the impact for us? Is it because of the distribution impact which you mentioned or is there anything else between the two geographies? What led to outperformance in one and what led to an impact to the other?
Mike Frank
Yeah, we’re quite pleased with the overall performance in Latin America last year, including in Q4. You know, our performance in Mexico, Central America and Brazil all outperformed the market based on our competitive intelligence. Argentina has been a very challenging market all, all year, including in, in Q4. We do expect that that’s going to start turning around as we head into FY26. But overall we believe our performance across Latin America was strong. As you said, in North America we had a very strong Q4. But again on a comparative basis the Q4 a year ago was somewhat weak.
And so, you know, you really need to take a look over the, over that time horizon. But we’ve got good momentum across the Americas. Again, as I mentioned, a lot of our new products, the 130 million-plus of new product revenue, a lot of that is going to come in Latin America. That would be the number one region from a new product standpoint. Next would be North America and then finally Europe. And so that’s where we’re optimistic going into FY26.
Somaiah Valliyappan
Thanks.
S. Ramesh
Good evening. I have SMEs from Nirmal Bond. Thanks for the insightful presentation and your good performance. So if you look at the guidance. Again in terms of the pricing pressure. That seems to continue, is it possible. To share how much of that will come from volume growth and what’s your expectation on pricing power going forward in FY 26 to 27? And secondly, in terms of your new. Product share, this is about 2%. If you look at your innovation rate, how do you read these two? Because there’s a divergent trend. So just to put that in context. If you can help us understand the share of new products, you’re talking about $130 million and the innovation rate of 25%. How do we stack that up? And in terms of the crop prices. If I may ask? They’re still trying to find their feet. So what is your reading on crop prices? When do you see that? Find some strength. Thank you.
Mike Frank
So maybe we’ll have each of the platform leaders talk a little bit about their price versus volume. I would say for the international crop protection business, as we look at FY26 right now, it’ll be primarily a volume driven growth. There may be 1 to 2% price. But we’re also expecting some FX headwinds specifically from Brazil and potentially a few other countries, I think from a new product stand standpoint. So our innovation rate in FY25 was 14% with the strong class of FY26 plus the ramp up from last year’s products. That’s where we’re expecting about a 17 and a half percent innovation rate in FY26, which is, which means 17.5% of our revenue are products that we’ve been in the market in the last five years.
So it kind of is a refresher. We call it the innovation rate. Again, as we look forward to the end of the decade, based on the strength of our R and D pipeline, we believe that our innovation rate by the end of the decade will be in the mid-20s, 24 to 25%. So we’re very excited about our new products that are coming through the pipeline.
Ashish Dobhal
For India, I think similar to what Mike has said, majority will be the volume growth. However, we are expecting at least 1 or 2% of price growth. Also in terms of our innovation rate, we are running at a innovation rate of 20% plus which in next three years we the way some of our portfolios are shaping up, we are looking at innovation rate in excess of 35%.
S. Ramesh
Let me ask a follow up question on sustainability sustainable and differentiated products. So is it possible to give us. Some broad ballpark share across the different geographies? Like we understand the overall revenue breakup, so is it possible to give us some kind of guidance in terms of. The breakup of the sustainable and differentiated. Products we’ve already achieved across the regions?
Mike Frank
Well, so firstly, you know, the, one of the reasons we’re so excited about our differentiated system sustainable products is because the margin profile on average is, you know, 600 to 1,000 basis points higher than the post patent segment. So from a profitability standpoint, again, they create a lot of value for growers and in turn they create a lot of value for us. You know, we don’t, we don’t split out specifically by geography, but I would say, you know, the strongest share of mix would be in Latin America where our differentiated portfolio would be you know, at or near that 50, 50 ratio already.
But we’re driving new innovation across all the regions and as I mentioned, about 80% of all of our new revenue that we’re delivering through new product launches is in the differentiated or sustainable category. And so, so that’s why we’re going to continue to move towards that 50, 50 mix in that 20, FY27, FY28 range.
S. Ramesh
Thank you very much.
Jai Shroff
It’s not easy sell to sell our, you know, the NPP portfolio, but we have launched products and have had tremendous success in, in Asia, in micro markets, on certain crop value chains and including Europe and Africa. So across the board we have seen great traction. It’s an evolving business, it’s an evolving understanding and so that will, you will see the results in consistently improving and our acceptance of all the technologies much more difficult to sell. Right now.
S. Ramesh
I had a question on the outlook for crop prices. So where do you see that?
Mike Frank
Well, it’s always hard to predict crop prices. If you look at, you know, futures right now there’s some strength in corn crops. You know, right now the stocks to use ratio on corn is, is very healthy with quite low ending inventory coming into this next year. Unfortunately, soybeans is the opposite of that where there’s lots of high ending inventories on soybeans. And so you know we’re, we think the soybean market is likely subdued with some potential strength in, in corn. Yeah. I mean so from a major row crop standpoint those two will kind of drive it and then other crops will get impacted based on substitution.
S. Ramesh
Thank you very much.
Abhijit Akela
Thank you. This is Abhijit Akela from Kotak. First one was just on the peak sales pipeline number that was shared in the slides. The number seems to be about $4.3 billion. I believe it was 5 billion pegged last year. So if you could please just help us understand, you know, what’s driving the change of there.
Mike Frank
Yeah, good question. There’s really two things. One is we pulled out obviously the class of FY25 that we just launched and it was a good class with a pretty strong ramp up in peak sales. And then secondly, as we looked at pricing, you know, as you know, over the past 18 months prices have come down across the board board in, in the crop protection space. And so we’ve scrubbed that aggressively and we did moderate pricing as we think about peak sales of those products, you know, based on the current realities. Now again I think this is probably as low as it gets.
So there could be some upside to that. But, but our, our planning on, on the roughly the four and a half billion of peak sales is based on the current market environment from a pricing perspective.
Abhijit Akela
Thank you. And the other one I had was just on the guidance this time there’s no mention of, you know, free cash flow or you know, further debt reduction or networking capital. So if you could please help us with those.
Jai Shroff
So I think the performance from last year we’ve been, we’ve established the, you know, what we’ve been able to deliver. I think all the platforms are completely focused on improving that and we continue to driving better business efficiency. We believe the whole industry will take guidance from what we’ve delivered and improve that. That will help us also to improve our cash generation. So that continued effort is I think there was prior to this year there was a little bit of discussion about our ability to reduce our or generate free cash and I think that is demonstrated.
So now it’s part and parcel of each of the platform’s KPIs or deliverables.
Abhijit Akela
Thank you.
Saurabh Jain
Saurabh Jain from HSBC. Congratulations on a good set of numbers and congratulations Anand on your superannuation and good to know that you will still be associated with the opl. So that’s very heartening. My question is again going back to the guidance, you said the first half is going to be subdued. Can you share more insights? Do you expect to be on the lower side of the revenue guidance or it can be even worse than that. And also if that is the case, given the base of the margin that we have in the first of last year, is it going to be a fair assumptions that the margins that we might do would be much, much better than what we did in the first half last year?
Anand Vora
You saw the quarter four, we ended with robust margins and I think the focus will remain on improving the margins.
I think considering what guidance have been given. And if you look at, you know, most of our peer group also they have been all talking about almost flat growth in revenue and maybe a little 1 or 2% growth in EBITDA while we continue to outperform and we are quite confident. But at the same time considering all the geopolitical thing and the turmoil which is there like today you saw both China and us have reached a deal where they’ve dropped the tariffs to 30%. And you know, so, so it’s highly volatile and we just would like to maintain our record which last to last we lost that record of always over performing on whatever we have guided.
So just being a bit cautious, it’s not that the team are not going to deliver or work towards showing an improvement or growth but we just thought if we are going to the investing community we should just be a bit careful, cautious considering all the turmoil that’s going around.
Mike Frank
And maybe just to add, you know, I do agree with the comment that, you know, the revenue growth in the first half will Be subdued. But to your point, you know our margins have improved as we went through the year and so I think you could model you know, similar margins to what we saw at least the global crop protection business in Q4 and we’re going to continue to be very disciplined disciplined in sga. So while margins will be, sorry while revenue will you know be I think modest. We should see some EBITDA growth including in the first half.
Saurabh Jain
Thank you. That is useful. But again when we just you know try to work out the numbers, your full year guidance on the revenue and EBITDA that translates to a full year EBITDA margins of about 18.5% while your current run rate is about 20% and you alluded to that it’s a safe assumptions to build in as the margins going forward. So what is the disconnect there? Or you are just trying to be more conservative and there could be upside risks to what you deliver.
Jai Shroff
Just to you know there is so much volatility in what is happening on commodity trade flows with China, with Brazil, US So it’s there is a lot of volatility and to predict exactly how everything is going to trend is. So it’s better to be conservative but we believe that UPL is in a better place to perform than the rest of the industry. So being, you know in such a volatile environment 1% here is. Is better to be safe.
Saurabh Jain
Understood. If one question I may just squeeze in. Your perpetual bond coupon is due to be reset this month. Right. Which is going to increase the cost for you by a big quantity. So any insights you can share what’s going to be the future strategy with the coupon? Are you looking to redeem that or. It’S going to continue? Any insights will be very useful. Thanks.
Anand Vora
You see the interest rates, especially the SOFR going or the treasury rates moving quite violently over the last three weeks again India premiums have gone up significantly. Hopefully they should be coming down. We have we are going to call a short notice board meeting and we’re going to place to the board both the options of whether we roll it over or we reading them. So we will take a decision and you will hear about it shortly.
Saurabh Jain
Thank you very much and all the best.
Tarang Agrawal
Hey. Hi, good evening. Tarang from Old Bridge. Just a couple of questions to Anand J and Mr. Anand. First how confident are you to really maintain the working capital numbers that you’ve come through as on 31st March 25th?
Anand Vora
I think this year we really focus hard and I think we, we ourselves were pleasantly surprised by all the, I would say all the four business sets the foot put in to really bring down the working capital, especially manage the inventory and also push, push aggressively for the collections. I think from here on our challenge would be to maintain at these levels. It could go up marginally, but I think everybody has seen the benefit of a lower working capital and how it can, you know, I would say even in improve the relationship with the distributors, there are a lot of distributors who have been very pleased with what we have been doing because it gets rid of some of the, you know, other marginal distributors as they, they struggle with the finances.
So overall we have seen very positive results on both the inventory management as well as the receivables. And I. We will continue and work towards maintaining at these levels. We could see a few days of working capital going up, but effort would be to maintain at the current levels.
Tarang Agrawal
So you basically moved from early 80s to about mid-50s. Now would you therefore be. I mean as we see you moving forward and also because what I picked up from Mike’s address also is generally overall working capital across the channels compressed. Quite a bit because of the cycle. That the industry underwent. So would it therefore be fair to. Presume that you guys would be closer to mid-60s maybe? I mean, or, or you could probably come back to early 80s.
Anand Vora
I think mid-60s should be something which should be modeled in. We’ll try to remain at the current levels. But as you know, this, this is really real push that we all the four businesses did, all four platforms. So I would say Pen in a mid-60s working capital in number of days.
Tarang Agrawal
Thank you, Jay. You guys have done exceedingly well in terms of overshooting your sustainability targets for financial year 25. And you know, it does seem like you’re going to probably overshoot your midterm expectations as well. So how does it overall, I mean. In the current scheme of things, how does it help you conduct your business? It’s great. It makes the organization more sustainable. But does it help you? You know, are your customers more amenable to transact with you? Does it position you better overall? How does it help in the overall business? We understand that sustainability link financing is. One ploy which helps out, but just wanted to get your perspective in terms of how it’s helping you.
Jai Shroff
So there are different aspects of sustainability. We look at, we look at our manufacturing platform. How do we go to more renewable energy? And that aspect is, is actually, you know, accretive. So we, we make a lot of, we get a lot of advantage. The cost of Energy is much lower. So that’s helping us on. On recycling waste. Recycling, creating value added products from our waste so we don’t put it in for incineration. All these aspects are something which our, our teams in different parts of our R and D development teams are constantly seeing how we can add value from our base, how we can recover more water, how we can reduce the amount of water, how we can use lower cost energy instead of cooling towers.
So there’s a lot of things which are actually accretive to bottom line. So we are implementing those and it’s very helpful, very exciting actually. Love you to come and see what we are doing. The energy cell and some of the other people they’re doing excellent stuff on the front end side on farmers on you know our. Our portfolio of what we call sustainable and differentiated technologies are all value added. So our approach as I was saying is comes from pain points. We see the sugar industry under a lot of pressure, sugarcane industry under a lot of pressure for reduction of water waste of fertilizer.
There’s a lot of soft pressure from the central government, from competing industries who need water cities. So all those. The Shashwat Mithas project is actually the World bank was here in Lucknow. They were very interested in what we are doing. So an environmental impact of overusing nitrogen etc. So these are huge challenges which there is a lot of soft pressure on the industry and if we believe that that some of these solutions at least the leadership in the sugar mills are very interesting interested. We need to incentivize that more in terms of heat stress and climate portfolio which we have, you know as temperatures in February, March increase there’s a lot of impact of heat stress on wheat and other crops.
We have amazing technology which can actually protect the plant from heat stress. So all those things we are piloting, large scale piloting. Quite a few farmers have adopted to that and they are seeing the benefit of all that high our technology to increase protein content in wheat. If you saw the budget last year I was so happy to see that that one of the big drivers in our government budget in India was about protein production and we can increase protein in wheat. We’ve seen some fantastic trials in Argentina and other places. So there is a lot of these things are all value adding and we will not bring technologies which is not really value adding and not increasing the cost because I don’t think that farmers in the world are ready to absorb more cost to be sustainable.
So all our portfolio of technologies are adding value, improving farmer resilience so we don’t see that as a burden. We see that as a long term opportunity. And as we breakthrough on some of the technologies and they go, they start scaling, we think the benefit of that because the profitability is good on these products much better than, as Mike said, than the regular technologies. So once we get a breakthrough and we are getting breakthroughs in different value chains, you will see the impact of that in recurring revenues from these businesses. The adoption of other technologies because they’re all unique and there’s no, there is nothing like, you know, you’re not competing on price, you’re competing on results.
And once you get the trust of the farmers or the food companies around that, because a lot of pressure is coming from food companies saying, can you help my farmers give me better quality or better yield? They want. The other thing is they want the farmers to earn more money money. So it’s much easier that they earn money by increasing productivity rather than, you know, paying them less. And some of these things are, which is where we are really focused on. So I don’t see that as much of a, it’s not a burden on the balance sheet.
It’s all incremental. Obviously we, and, and just transportation, you know, you’ve seen the transfer. You know, we are spending tens of millions of dollars on transportation. Going to EV is really, we, we think we can save a lot of money. So all the things we are implementing are value accretive to, to us and, and we are getting the credit for that. Our team is a little more agile than most other companies, so we are a little bit ahead of the curve. But I think eventually a lot of people will catch up and we’ll move on.
Anand Vora
Thanks, Raj. You want to add something on manufacturing?
Raj Tiwari
No. I mean, you know, sustainability for us has been, you know, a governance and a efficiency tool. I mean, it is not that, you know, we have to do for the sake of and because of, you know, the work which we have done and the history behind it. I mean, you asked about the, you know, traction with the customer on the spectrum side. On, you know, we do see interest in terms of attractiveness, not in terms of pricing, but in terms of better relationship and better share of business. I mean, that’s what I can say.
But for us, you know, without this, we don’t exist. So that’s the starting point. So both in governance as well as on environmental, you know, front.
Tarang Agrawal
Just one question. On Advanta, during your address, you did. Seem to hint that at some point of time Europe could be a sizable. Market for you would it be in the current suit of crops that you’re operating or you’re looking at new crops number one. Number two in financial year 25 specifically I think corn was flattish or slightly below financial year 24. My sense is it has to do. A lot with procurement which you spoke of in H1. But how should we look at. I mean in FY26 is. Is con going to be really the. Big driver for your business and also on Europe. Thanks.
Bhupen Dubey
Thank you and congratulate. Congratulation to you. You could really understand what I was speaking in in my presentation. So two comments on the Europe part. I think it’s a bit personally we. We started R and D station in. In Ukraine in 2016. In especially Europe, Central Europe and Eastern Europe. One of the important market is. Is sunflower seed. Nearly a billion dollar. Normally we before we identify targeted segment we just look within our system. What are the competencies which we have which can help us producing a seed which has a unique proposition for the farmer.
We just don’t want to go for the sake of participating in a me too segment. That is not the philosophy we operate on. We believe that we have a unique gem plasm in Sunflower. We have a nearly 35, 38% market share in Argentina same germplasm using in this market. We always adapt it for the local distribution is tolerance. So we started investing in 2016 and 2021. It’s a long cycle, you know that we started getting a me too product and we started advancing in the marketplace commercially. And now a couple of products are there which are differentiated.
We have R and D in Ukraine a production center. We divided. We decided to put in Romania and unfortunately first struck for the commercial sale move from Romania into Ukraine. And that was 22-02-2022. Russia invaded. Such a disappointing part that part. So we were. We were at a crossroad. We thought it will go away six, eight, nine months, one year. And still we must continue. So we continue that investment R D, GTM etc. Etc. Now we’re becoming too tough now become nearly three years. So in fact before I came here a week before we had a strategy meeting.
What do we do? It’s like a sunk cost because we have a. We have to deliver and we have more other segment available. Should we stick with it? So our team decided that no we will maintain our the expenses under control. GTM under control. So we are moving this R D activity towards Hungary which is central part of it. I’m giving little more Details to you so you understand thought behind art. Because do we do believe that this a billion dollar market, this fragmentation is happening there. Many of the European company who are very good in these products in in France and all they are not able to sell to Russia.
Advanta is perceived globally as a, you know, Indian company and therefore friendly towards that part of the world. And therefore we have, we have great opportunity. So so we and therefore I still believe that that should give us about 15 to 20% on a realistic basis. Could be more part one, part two in the geography where we build up our position with the sunflower. We we do believe that we have a genetics in temperate corn. All the corn store you have seen right now success coming out of the tropical cone, subtropical cone. And we we believe now we need to expand the addressable market and we have gem plasm small in in Australia, in Argentina and and we want to invest in Gemplazm also.
In fact we have not. We also acquired some small jump plasm company in Italy, a very small one, but from R D perspective very important. So we are building a gemplasm bank for the temperate corn and in a couple of months we will decide on appointing a breeder etc and set the breeding there. So these two joint put together we believe that we can really add tremendous value in this market. So that is part of the Europe story. In terms of India part you observed very, very rightly last year we suffered quite a lot. Demand was robust.
Demand is robust and likely to be robust because of the reason I explained currently, if you have seen our working capital part, February March picked up much, much higher than the last year. Significantly, as I speak right now, more and more trucks are coming from the seed production farmers to our plant as I speak to you today. So we are very comfortable in terms of tropical subtropical con which is coming up. And we are very well covered compared to last year and compared to the the expectation which we have. So demand is very very robust and likely to continue.
And you have seen that Ethomax and we have a differentiated product. Right? So so that way I think that story will continue, momentum will continue. Quite robust.
Tarang Agrawal
Thank you and congrats to the team. On a very strong pullback. Superb. Thanks.
S. Ramesh
Hello, can you go? Yeah. So in terms of your debt reduction. Can we assume that the entire interest cost on the debt reduction will flow. Through below EBITA or is there some. Incredible increase in interest cost building because you may see some incremental growth in debt? How do you see that?
Anand Vora
So we have when we gave the guidance we have. Of course we are given up to ebitda, but we will see some reduction in interest costs as we move forward because of the cash generated during this year. But at the same time, geographies like Brazil and some other Latin countries, interest costs are going up actually. So it’s going to be volatile. We have built in some higher interest costs, but we expect to end the year at least next year, hopefully if everything goes well with a reduced interest cost.
S. Ramesh
So without any intention to put you on a spot, going back to the guidance, it seems to me that if. You see the way seed business and UPLSA is going, they may perform above your, you know, 4 to 8% growth guidance and maybe UPL Corp may possibly be growing at a slower pace. Is that already correct?
Anand Vora
Well, we need your good wishes. I’m sure we’ll do it.
S. Ramesh
Thank you.
Jai Shroff
I think just to be very cautious, you know, coming from a very tough last year to very improved year, I think everybody is to going cautious. I think all the businesses will deliver growth, I believe and I think we should have more positive outlook than can be much more positive.
Anand Vora
Any further questions or we can call it a day. We’ll be available for one on one discussion. Discussions. But if there’s any further questions. Happy to take.
Jai Shroff
Yeah, thank you. Okay, please join us.
Anand Vora
Yeah, just before we end, I just want to introduce Bikas who is going to take over. And before I hand over because why don’t you just come. And before I hand over the mic to him, I would like to thank each one of you all for your support. Thank you very much.
Bikash Prasad
Standing here today and assuming the role of group CFO of your admired company is a true honor for me and CFO. UPL’s journey, remarkable journey of growth, transformation and innovation really inspires me and I’m eager to build on the momentum as I take over the mantle from Anand. I would like to express my heartfelt gratitude for his exceptional contributions to the group. His leadership has been exceptional and really led to the financial success and the growth. As I’m stepping into this role, I am committed to upholding the highest standards of integrity and professional discipline while driving sustainable growth and value creation.
I’m truly excited to join the talented teams at UPL and looking forward to work alongside all the partners like you in navigating the evolving landscape. I look forward to contributing to the continued success and growth for the group.
Anand Vora
Thank you. Thank you. Please do join us for high tea.