UPL Share Price Sees Best Day In Six Months After Nuvama's 'Buy' Upgrade

Shares of agrochemical manufacturer UPL Ltd. soared over 7% on Tuesday—the highest intraday jump since May 10—after Nuvama upgraded the stock on potential revenue growth and margin improvement.

The brokerage upgraded the company to 'buy' from 'reduce' at a target price of Rs 590 per share from Rs 486 apiece earlier. This implies an upside of 15% from the previous close.

“Our volume growth continues, and we are on the path to achieving our Ebitda and net debt guidance levels," Jai Shroff, chairman and group chief executive officer said after the company posted its second-quarter earnings.

The pesticides and agrochemicals company gave a revenue growth guidance at 4–8% and Ebitda growth of 50% for fiscal 2025, Nuvama said. "Company confident of margin expansion in the second half of fiscal year; destocking phase is over."

UPL posted a net loss of Rs 585 crore in the quarter ended Sept. 30, 2024. UPL's revenue rose in the second quarter, driven by 16% volume growth. Ebitda margin was 14.2%, affected by pricing pressure in crop protection. Net debt rose by $627 million.

UPL stock rose as much as 7.3% during the day to Rs 552.8 apiece on the NSE. It was trading 5.5% higher at Rs 543.5 apiece, compared to a 0.37% advance in the benchmark Nifty 50 as of 10:00 a.m.

It has declined 2.1% during the last 12 months and has fallen by 7.3% on a year-to-date basis. Total traded volume so far in the day stood at 15 times its 30-day average. The relative strength index was at 45.

Seventeen out of the 28 analysts tracking the company have a 'buy' rating on the stock, six suggest a 'hold' and five have a 'sell', according to Bloomberg data. The average of 12-month analysts' consensus price targets implies a potential upside of 6.7%.