UPL rises 3.5% as brokerage upgrades stock to ‘buy’

Shares of UPL were trading 3.5 percent higher on the NSE at 11 am on September 14, after brokerages revised the rating to “Buy”. The stock opened at Rs 615.55, up by 1.2 percent from close on September 14.

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Antique Stock Broking has revised its rating on UPL to a Buy due to the stabilising of product price and receding channel inventory. UPL has also seen a correction in stock price by ~18 percent since March 2023.

For 2HFY24, the brokerage expects UPL’s revenue and EBITDA growth to rise due to signs of improvement in the industry with respect to channel inventory situation as prices have stabilised since June’23.

The brokerage also expects UPL to see a decent volume off-take from 3QFY24 onwards with demand kicking in from NAFTA and LATAM. On the hand, realization growth could come back from 4QFY24 onwards.

Analysts at Antique also expect the company to reduce debt by around $300 million YoY during FY24 due to lower raw material prices and strong cash flow generation aided by the expectation of volume growth in 2HFY24.

Also read: Sluggish demand, unclear debt reduction target push UPL into a pool of downgrades

UPL is a leading manufacturer and marketer of agrochemicals, industrial chemicals, chemical intermediates, and specialty chemicals.

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