UPL share price corrected sharply so far in 2026, but global brokerage Jefferies remains positive on the agrochemical company, citing improving earnings prospects, margin expansion and potential value unlocking from the Advanta IPO.
Following a meeting with UPL's senior management, Jefferies said the company remains confident of achieving its full-year growth guidance of 10-14%, with second-quarter performance expected to be broadly in line with the guidance.
The brokerage expects UPL's EBITDA to grow 14% year-on-year (YoY) in FY27 and has maintained its Buy rating on the stock with a price target of Rs 715.
Despite the rising El Niño fears in Brazil and Latam, UPL sees demand shaping broadly in line with guidance on the back of a strong showing in India, Africa and the US in crop protection and continued double-digit growth in Advanta.
Jefferies expects Q2 will continue to benefit from forex exchange translation tailwind. Management expects y/y volume growth in all four businesses in 2Q
Another key catalyst for UPL is the proposed IPO of its seeds business, Advanta.
UPL received SEBI approval for the IPO in June 2026 and expects to begin marketing the offering soon. Management remains optimistic about value unlocking, given Advanta's faster growth and higher profitability compared with the broader UPL business.
Jefferies believes the IPO could provide a clearer valuation benchmark for Advanta and potentially unlock value for UPL shareholders.
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UPL Valuation Still Undemanding
Despite the near-term risks, Jefferies believes UPL's current valuation remains attractive following the stock's 28% correction year-to-date in 2026.
The brokerage values UPL at 14 times June 2028 estimated forward P/E, broadly in line with the company's long-term average valuation.
With expectations already moderated after the sharp correction, Jefferies believes the risk-reward has become favourable.
The brokerage has therefore maintained its ‘Buy' rating on UPL shares with a target price of Rs 715, while investors will continue to watch the El Niño situation in Latin America, margin recovery and progress towards the Advanta IPO as key triggers for the stock.
On Monday, UPL share price ended 0.25% higher at Rs 571.00 apiece on the BSE.
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