With a recovery and deleveraging underway, HSBC believes UPL is entering a virtuous cycle that could unlock value.
Antique Stock Broking has also maintained a ‘Buy’ rating and raised the price target to ₹730 from earlier ₹710.The brokerage said UPL’s Q1 performance was subdued, but FY26 guidance remains intact.
It added that planned price hikes in key products may aid margin recovery, while balance sheet deleveraging remains a medium-term priority.
However, it trimmed FY26/FY27 estimates slightly due to ongoing cost pressures.
On the other hand, Kotak Institutional Equities has a ‘Sell’ rating on the stock, with a price target of ₹520.
Kotak said Q1 surprised positively on gross margins, supported by price increases, input cost correction, and improved plant utilisation.While these tailwinds may persist in the near term, the brokerage flagged concerns about their long-term sustainability given soft demand and intense competition. It has raised its FY26E EBITDA estimate by 12%, but FY27-28 estimates only by 1-4%.
UPL’s net loss narrowed during the June quarter, in comparison to the loss that it reported during the same quarter last year. The company posted a net loss of ₹88 crore, compared to a net loss of ₹384 crore that it reported during the same quarter last year.
The company’s impairment costs at the end of the June quarter surged to ₹192 crore from ₹87 crore last year, primarily due to one client from Brazil – non-cash loss of ₹112 crore.
In its earnings call, UPL said that channel inventory levels have returned to normal, and restocking is progressing as expected to meet growing demand.
The company said that growth this year is expected to be back-ended, with a stronger performance in the second half.
UPL remains on track to deliver $130 million in new revenue from product launches this year, most of which will come in H2. The company said it remains cautiously optimistic about Q2 and the remainder of the year, which is broadly expected to be driven by margin-accretive growth.
For the full year, UPL has maintained its revenue growth guidance to be between 4% to 8%, while its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) growth guidance has also been maintained between 10% to 14%.
UPL’s investor presentation highlights that its net debt has come down by over ₹6,000 crore from ₹27,500 crore at the end of the June quarter last year, to ₹21,371 crore this year. However, the number is a huge increase from the March quarter number of ₹13,858 crore.
Shares of UPL are now trading 6.38% higher at ₹707.60. The stock has climbed over 40% so far this year.
