UPL shares settled more than 6% lower on Tuesday after brokerage Jefferies cut its target price on the stock, citing profit after tax (PAT) and EBITDA that came in below estimates despite revenue meeting expectations. The stock settled at ₹581.90 per share on the NSE, down 6.15%, marking a reversal from the stock's recent two-session gain. According to CNBC TV18, Jefferies lowered its target price to ₹715 per share after the agrochemical company's June-quarter earnings fell short of expectations. The brokerage noted that revenue growth was largely driven by foreign exchange gains, while EBITDA remained soft despite inventory gains, while also flagging working capital as an area of concern, with net working capital increasing to 110 days from 87 days a year ago.
UPL Ltd. delivered a robust first quarter performance, beating Street expectations and returning to profitability. According to reports from CNBC TV18, the agrochemicals major reported revenue of ₹10,181 crore, marginally ahead of the CNBC-TV18 poll estimate of ₹10,151 crore, while EBITDA came in at ₹1,500 crore, also beating estimates of ₹1,491 crore. However, consolidated net profit declined sharply to ₹10 crore for the quarter ended June 30, 2026, compared with ₹1,061 crore in the preceding March quarter, representing a sequential decline of about 99.1%. The company described the June quarter as its seventh consecutive quarter of revenue and EBITDA growth, adding that it delivered its strongest first-quarter net income in three years. As per Business Standard, sales rose 10.47% to ₹10,181 crore in Q1 FY27, compared to ₹9,216 crore in the previous year, demonstrating strong operational momentum. According to Systematix, revenue increased 10.5% YoY to ₹10,180 crore, driven by 3% pricing growth and favourable currency movements, partly offset by a 3% decline in volumes.
The June quarter marked a clear shift in industry dynamics as agrochemical companies found room to pass on higher costs rather than compete aggressively on price. According to CNBC TV18, UPL reported positive pricing across all its businesses, with overall pricing contributing around 3% to revenue growth. The India crop protection business delivered pricing gains of 8-9%, seeds saw pricing improve by 13-4%, while specialty chemicals recorded the strongest increase of 34-35%. This pricing power helped revenue rise over 10% during the quarter and expanded contribution margin by 100 basis points to 45.2%. EBITDA increased 11.3% YoY to ₹1,450 crore, 5% above Systematix's estimate of ₹1,420 crore, supported by contribution margin expansion, better product mix and lower finance costs. Consolidated EBITDA margin improved to 14.7%, while the India crop protection business stood out with EBITDA rising 34% and margins expanding by roughly 750 basis points despite delayed monsoon-led volume pressures. However, Jefferies noted that reported revenue growth was largely supported by favourable foreign exchange movements, with underlying volumes declining 3% even as pricing improved 3%.
Growth was broad-based across UPL's business segments, as reported by CNBC TV18. UPL Corp expanded 7%, Advanta grew 26%, while SUPERFORM posted 14% growth. Geographically, India and the Americas led the performance, with support from other international markets. Contribution margins improved by 180 basis points, helped by pricing actions, better capacity utilisation and a favourable product mix. Revenue increased 10.5% year-on-year from ₹9,216 crore, while EBITDA grew 15.1% to ₹1,500 crore, supported by a 56 basis-point expansion in operating margin to 14.7%. According to Systematix, profitability improved on the back of contribution margin expansion, better product mix and lower finance costs, with the company reporting a PAT of ₹10 crore compared with a loss of ₹90 crore in Q1 FY26. Operating profit margin improved to 13.43% in Q1 FY27 from 15.15% in the previous year, while PBDT increased 33% to ₹732 crore and PBT turned positive at ₹100 crore compared to a loss of ₹181 crore in Q1 FY26. Among the business segments, Advanta remained the standout performer, delivering 26% revenue growth, while the core crop protection business was weighed down by adverse weather conditions across key markets.
Jefferies flagged working capital as an area of concern, with net working capital increasing to 110 days from 87 days a year ago, although net debt remained broadly unchanged at $2.5 billion. Despite these concerns, management expects further price increases across the agrochemical industry over the rest of FY27 as elevated input costs and geopolitical uncertainty continue to reshape the operating environment. As reported by CNBC TV18, UPL moved early to raise prices after the conflict in West Asia pushed up costs for energy-intensive products, helping shield profitability in the June quarter. With rivals now beginning to follow suit, management said the likelihood of broad-based price cuts has become "very low", with any further increases expected to remain in the low- to mid-single digits. The company noted that distributors continue to buy on a "just-in-time" basis following the painful inventory correction of FY24, keeping channel inventory lean despite resilient underlying farm demand. UPL's own inventory increased during the quarter as it built stocks ahead of the upcoming season and accounted for higher replacement costs, while raw material inventory currently covers around 90 days of production. Jefferies expects 14% EBITDA growth in FY27 and believes the investment case now hinges less on the June-quarter miss and more on UPL's ability to execute against the guidance it has laid out for the rest of the year.
Chairman and Group CEO Jai Shroff highlighted that structural demand for crop protection, seeds and bio-solutions remains intact despite macroeconomic uncertainty, allowing the company to maintain momentum. As reported by CNBC TV18, he also highlighted plans to unlock shareholder value through a proposed global crop protection platform and the continued development of its seeds and post-harvest businesses. Group CFO Bikash Prasad noted that disciplined execution and profitable growth continued to strengthen the company's financial profile, with UPL maintaining net debt while improving its gearing despite seasonal working-capital requirements. Management retained its FY27 guidance of 7-11% revenue growth and 10-14% EBITDA growth, with forecasts based on constant currency assumptions. Growth is expected to be led by the global crop protection business, while seeds and specialty chemicals are also projected to remain key contributors. According to Systematix, the brokerage maintains its Hold rating with updated price target of ₹670, implying 5.7x FY28E EBITDA. Jefferies said the stock's 21% decline so far in CY2026 leaves valuations undemanding, arguing that the sharp correction has already priced in much of the near-term weakness while the company's medium-term growth outlook remains intact.
