A Vanguard-backed chemical company has drawn investor attention after outlining its growth strategy for FY26, aiming to boost both revenue and EBITDA. Following a year of operational challenges, the company is banking on improved capacity utilization, product diversification, and global demand recovery to drive its financial performance in the coming fiscal year.
During Thursday’s trading session, the shares of UPL Ltd went down to Rs.630.10 per share, falling 1.23% from the previous close of Rs. 638 per share. The shares have retreated from the bottom and are trading at Rs. 631.75 apiece.
FY26 Outlook
UPL Ltd has provided its financial outlook for FY26, projecting revenue growth of 4 to 8 percent. The company also expects its EBITDA to grow in the range of 10 to 14 percent. This guidance reflects UPL’s focus on operational efficiency, strategic initiatives, and gradual recovery in global agri-input demand.
The company aims to enhance cash efficiency by negotiating better credit terms and optimizing billing cycles for payables. Efforts will be made to reduce low-margin sales while maintaining industry-leading working capital days. Additionally, the strategy includes aligning sales closer to peak seasons in key markets such as Brazil to improve cash conversion.
The company is prioritizing profitability over sheer volume growth by optimizing its product mix and emphasizing high-margin products like new product launches (NPLs). SKU rationalization is underway to streamline offerings, and a global implementation of channel “sellout” strategies is being adopted. Moreover, there is a strong push to accelerate regulatory timelines for cyproflanilide to unlock market potential.
Innovation remains a key pillar, with a focus on expediting product registrations, especially for new active ingredients (AIs). The company is targeting a stronger innovation rate and is projecting over USD 130 million in new product launches (NPLs) for FY26, reinforcing its commitment to driving future growth through scientific advancements.
UPL Ltd aims to accelerate growth in its Natural Plant Protection (NPP) segment, targeting a 13 percent CAGR from FY25 to FY30. Despite market challenges, volume-led revenue growth and strong product acceptance continue to drive profitability.
Geographically, UPL is expanding rapidly with successful launches in Brazil, North America, and other key regions. It aims to surpass USD 700 million in NPP sales (excluding India) by FY27, supported by 10 new technologies currently in development.
Advanta Seeds, a global seed company under the UPL Group, has announced a strategic acquisition of key corn assets from K-Adriatica. The deal includes temperate corn breeding germplasm, a strong pipeline of hybrids, and a diverse corn product portfolio.
This acquisition significantly boosts Advanta’s position in the European corn market by expanding its crop portfolio and enhancing its value proposition to farmers. The acquired germplasm is well-suited to European agro-climatic conditions, making it a strategic fit for the region.
Financial Performance
According to its latest financial results, UPL Ltd reported a consolidated revenue of Rs.46,637 crores in FY25, marking an 8.2 percent rise from Rs.43,098 crores in FY24. However, this figure reflects a 12.9 percent decline compared to Rs.53,576 crores in FY23.
The company also delivered a notable turnaround in profitability, posting a net profit of Rs.820 crores in FY25 after recording a loss of Rs.1,878 crores in FY24. Nonetheless, net profit fell sharply by 81.4 percent from Rs.4,414 crores in FY23, mainly due to higher operating and interest costs.
The company has a Return on Capital Employed (ROCE) of 8.95 percent and a Return on Equity (ROE) of 3.97 percent. Its Price-to-Earnings (P/E) ratio stands at 40.64, higher than the industry average of 37.7. Furthermore, the company maintains a current ratio of 1.74, a debt-to-equity ratio of 0.86, and an Earnings Per Share (EPS) of Rs.15.45.
As per the shareholding pattern in March 2024, promoters of UPL Ltd held a 33.50 percent stake in the company. Foreign Institutional Investors (FIIs) accounted for 34.22 percent, with Vanguard International Value Fund alone holding 1.01 percent. Meanwhile, Domestic Institutional Investors (DIIs) owned 18.56 percent, and retail investors held the remaining 13.72 percent.
Written by – Siddesh S Raskar
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