UPL Ltd., a leading global agrochemicals manufacturer, has experienced a notable surge in its share price following the announcement of its third-quarter (Q3) results for the financial year 2024-25. The company reported a net profit of ₹828 crore, a significant turnaround from a net loss of ₹1,217 crore in the same quarter the previous year. This impressive performance has led to a 5% jump in UPL’s shares, which reached ₹636.45, reflecting renewed investor confidence.
As per Hegde, domestic brokerage firm Investec has revised its call on UPL from sell to buy while raising the target price from Rs 450 to Rs 700 as the outlook is good while the valuation is favorable.
The company has raised the EBITDA estimate by 1-3% for FY25-27 and also stated that UPL should be able to lower the debt level from the rights issue, Advanta stake sale, and operating cash flow.
Nuvama has recently lowered its expected FY25 earnings per share by 6% while raising FY26E/27E earnings per share by 12%/10% by expecting much improvement in the demand situation. The brokerage firm has also upgraded the target price to Rs 705 from Rs 590 earlier and given a value to the stock based on the multiple of 13X on their rollover to Q3FY27E EPS.
Increases in revenue for UPL were recorded to be at 10% YoY by volume/price/currency while those of C&CA were at 9%/5%/(4% respectively. Significant sales improvements were recorded specifically in the Latam and Europe regions; it also benefited from stronger NPP solutions’ margin sales in the European and Brazilian markets.
Management has posited the targeted business growth figures, which entail the growth of the Company’s EBITDA by 50% on a YoY basis. Nuvama noted that much of the active ingredient portfolio of the business is already expected to be at a stable position for the 3QFY25 exit EBITDA margin of 19.6 percent.
When asked about the overall trend that UPL is observing in the current year against the previous year, the Chairman and Group CEO, Jai Shroff, opined that there are signs of strong recovery now, and there will be a normalization of business, volume, and price.