Positive on UPL in long term, maintain Buy on the stock with 49% return potential: Anand Rathi

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26 Aug, 2025 12:21

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By Anand Rathi

With the start of the new financial year, new tax rules have taken effect. As you may have ended up with some extra finances, possibly due to altered cash flow or claims made from your company for the previous year, Anand Rathi picks out UPL in the week ahead.

UPL | Rating: Buy | Target: Rs 1095, stop loss: Rs 728 | Return: 49%

Despite headwinds in key geographies, UPL posted healthy volume growth of Q3FY18, 12 percent y-o-y, driven by steady performance in India and Europe, EBITDA grew by 10 percent at Rs 8290 million with Margins expanding by 50bps at 19.8 percent. Lower interest cost and tax credits led PAT to deliver growth of 23 percent at Rs 5690 million.

Management highlighted that realizations fell due to high inventory level in the market. In terms of constant currency revenue grew by 9 percent. EBITDA grew by 24 percent at Rs 6910 million with margins expanding by 300 bps y-o-y. Adjusted PAT grew by 43 percent at Rs 2380 million.

Management has maintained the revenue guidance growth at ~10 percent for FY18 and indicated an improvement in EBITDA margins by 50-75 bps going forward.

Tie-up with Bayer in Brazil has started to bear fruits and would further help to drive volume growth, as UPL gets access to Bayer’s robust distribution

Management is more optimistic for the growth of herbicide, Next growth driver from the biologic market.

UPL’s long-term prospects remain positive, led by a balanced presence across geographies, product segments and crops, rising market share in high-growth countries like Brazil and India, and presence across the value chain.

We continue to maintain our “BUY” rating with target price of Rs 1095

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.