Shares of UPL surged over 5 percent and hit a 52-week high of Rs 636.80 on February 3 after global brokerage Investec upgraded its rating on the stock to 'buy' from the earlier 'sell' call. In addition to the rating upgrade, Investec raised its price target for the stock to Rs 700, sharply higher than the previous target of Rs 450.
Investec's optimism towards UPL is driven by expectations that the company will successfully reduce its overall debt levels in FY25. UPL's net debt stood at Rs 27,531 crore as of September 2024.
The brokerage also remains confident that UPL will meet its guidance, supported by a recovery in global macro demand and a strong focus on operational efficiency.
At 09.31 am, shares of UPL were trading at Rs 632.60 on the NSE.
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Meanwhile, sentiment for the stock also improved following the announcements of several measures in Budget 2025 to support the the agriculture sector, all of which stand to benefit UPL.
In the Union Budget 2025, Finance Minister Nirmala Sitharaman introduced several measures to promote crop diversification, improve irrigation facilities, and enhance credit access for farmers. She also launched a mission to achieve self-reliance in pulses over the next six years, focusing on tur, urad, and masur.
"The government will implement the Dhan Dhanya Yojana in partnership with states to boost productivity, diversify crops, enhance post-harvest storage, improve irrigation, and provide both short- and long-term credit to support 1.7 crore farmers," Sitharaman announced.
An improvement in rural consumption and farmers incomes stand to directly benefit UPL since this segment makes up the company's prime consumer base.
With gains in today's session, shares of UPL have extended their winning streak to the fifth straight session, recording an over 17 percent surge in the tenure.
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