UPL shares gained 2 percent intraday on September 21 after having closed in red for two consecutive trading sessions.
Recent brokerage reports bearing positive outlook on business prospects for agri-chemical companies in Latin America seemed to have weighed in on the stock's upward move.
At 12.30 pm on the NSE, the UPL stock was quoting at Rs 625.10 apiece, up Rs 2.60, or 0.42 percent. It hit an intraday high of Rs 635 before paring early gains.
The stock, which is down nearly 13 percent in year-to-date terms, is seeing an upward trend since August 18.
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In its results for the April-June quarter, the company reported a 17.17 percent YoY (year-on-year) decline in revenue from operations at Rs 8,963 crore. Net profit was down 89.85 percent YoY at Rs 102 crore. The operating profit margins for the quarter contracted by 600 basis points on a yearly basis to 14 percent.
Brokerage rating
Citi has a ‘buy’ rating on the UPL stock. The brokerage seeing an upside potential from the current price levels has set a target price at Rs 800 per share.
Considering that UPL derives a major chunk of its revenue from Latin America, followed by the Northern American markets, the brokerage said, “Recent data for the first half of CY24 is positive on-demand recovery. United States farmer’s profitability in CY23 will be above historical levels. The US Agriculture Department also suggests a pick-up in soybean production in Latin America in the ongoing fiscal.”
Domestic brokerage Prabhudas Lilladher in its recent sectoral update had also pointed out how Latin America's largest country Brazil had been outpacing the US in production volumes. "As with soybeans and corn, Brazil is now ready to unseat the US as the world's top cotton exporter," it said.
UPL is engaged in the business of agricultural solutions and crop protection. The company produces a wide range of agrochemical products, including pesticides, herbicides and fungicides, to enhance crop yields and quality.
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