Indian companies have a horrible track record on M&A (actually, M&A sucks globally too) - Tata Motors, Tata Steel, Havells, Motherson (if you ignore what they got for free in 2008), M&M. Recently, UPL has joined this elite club of losers and its gonna go through real tough time
UPL had a big rally on news of "a reduction in net debt" of $1.2bn last qtr (cash up $0.6bn, debt down $0.6bn). This likely came from 2 sources: a seasonal decline in inventory (see 3Q transcript below) & potential factoring (receivables sale). Both will reverse in current qtr 
Working cap reduction can help raise cash in the interim for UPL (possibly to meet some debt covenants on almost $4bn of debt, just a guess) but the company will need to reinvest in both to sustain sales in highly consolidated & mature sector where Top-4 control 80%+ market
The temporary reduction in debt/increase in cash through working capital liquidation was rather urgent since the UPL needs about 2,200Cr/qtr simply to cover its fixed overheads & interest expenses. It had only 1,958Cr cash balance at the end of Dec-2019
On top of being highly leveraged in a difficult and competitive sector, UPL is possibly going through integration challenges but that's a smaller worry compared to its debt mismatch. More than 90% of its $4bn debt is in USD/EUR/JPY & only 25% of its revenue is in these currencies
@threadreaderapp unroll please
