Foreign brokerage Jefferies has lowered its target price on UPL to Rs 715 from Rs 810 after the agrochemical company's June-quarter earnings fell short of its expectations.
Yet the brokerage has retained its ‘Buy' rating, arguing that the stock's sharp correction this year has already priced in much of the near-term weakness while the company's medium-term growth outlook remains intact.
Sonali Salgaonkar and Aman Chowdhary of Jefferies believe the market's focus should now shift from the June-quarter miss to whether UPL can deliver on its FY27 guidance.
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Management has projected 7-11% revenue growth and 10-14% EBITDA growth, backed by volume recovery, modest pricing gains and new product launches, giving Jefferies confidence that earnings growth can improve from here despite a softer start to the year.
Jefferies said revenue for the quarter was broadly in line with its estimates, but EBITDA fell around 7% short despite inventory gains in the crop protection business, while the company reported a net loss against its expectation of a break-even quarter.
It noted that reported revenue growth was largely supported by favourable foreign exchange movements, with underlying volumes declining 3% even as pricing improved 3%.
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.
The brokerage also 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.
UPL Q1 Results
UPL, meanwhile, reported 10% year-on-year (YoY) revenue growth to Rs 10,181 crore, while contribution increased 15% to Rs 4,607 crore.
EBITDA stood at Rs 1,500 crore, with the margin improving to 14.7%, supported by pricing actions, better capacity utilisation and a favourable product mix.
The company described it as its seventh consecutive quarter of revenue and EBITDA growth and its strongest first-quarter net income performance in three years.
Despite trimming its target price, Jefferies said the stock's 21% decline so far in CY2026 leaves valuations undemanding.
The brokerage 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.
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