Shares of UPL jumped 7 percent to Rs 715 apiece on August 4 after management reaffirmed its FY26 guidance despite a weak June quarter performance, prompting brokerages to maintain their bullish stance on the stock.
In the first quarter, the agrochemical firm reported a net loss of Rs 88 crore, a sharp improvement from the Rs 384 crore loss a year ago.
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Revenue from operations grew 1.6 percent year-on-year to Rs 9,216 crore, while Ebitda rose to Rs 1,303 crore from Rs 1,145 crore. The Ebitda margin improved to 14.1 percent from 12.6 percent, indicating early signs of operational recovery even as topline growth remained subdued.
What turned the tide in UPL's favour was management’s decision to stick to its medium-term targets, with FY26 revenue growth projected at 4 to 9 percent and Ebitda expected to rise 10 to 14 percent.
The full-year tax rate is expected to remain between 15 to 17 percent, depending on the product mix and the pace of capex execution. Management is also targeting an additional 130 million dollars in revenue in the second half of FY26 from new molecule launches and has indicated that acquisitions remain under evaluation, although deleveraging is a key priority.
Brokerages responded positively. Nuvama Institutional Equities raised its price target on the stock to Rs 808 from Rs 781, calling UPL’s reaffirmed guidance credible and suggesting that the worst of the inventory and pricing pressure may now be behind.
Antique Stock Broking also retained a buy rating, raising its target to Rs 730 from Rs 710, and said planned price hikes in key products could aid margin recovery.
Motilal Oswal, while maintaining a neutral stance with a target of Rs 700, noted that UPL is on track to accelerate growth in the second half of FY26 through its Super Specialty Chemicals business, new product introductions, and increased market penetration via Advanta.
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