Earnings Outlook
Views split on UPL Q1 bottom line on weak export volumes
This story was originally published at 16:34 IST on 1 August 2026
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By Gunjan Rajput
NEW DELHI - Analysts are divided over whether higher product prices and favourable currency movement will be enough for UPL Ltd. to offset weak volumes due to excess channel inventory, the delayed monsoon in India, and sluggish demand from Europe and the Americas. Three brokerages expect the company to report a loss for the quarter while two others expect it to make a net profit. The company's revenues for the reporting quarter are expected to rise significantly on year.
UPL is expected to post a consolidated net loss of INR 100 million-INR 3.53 billion, according to estimates from three brokerages. The highest estimate for net loss is from Nuvama Wealth Management Ltd. and the lowest is from Motilal Oswal Financial Services Ltd. In contrast, 360 ONE Capital Market Pvt. Ltd. expects UPL to report a net profit of INR 71 million and PhillipCapital (India) Pvt. Ltd. projects a net profit of INR 1.87 billion. If the company reports a net profit for Apr-Jun, it will be the fourth consecutive quarter in the black. The company had reported a net loss of INR 790 million for the year-ago quarter.
UPL is expected to post consolidated revenues of INR 101.48 billion for the June quarter, according to the average of five estimates. The highest estimate is INR 104.4 billion from 360 One Capital and the lowest is INR 99.3 billion from Nuvama. The company had reported revenues of INR 92.16 billion for the year-ago quarter.
SPLIT VIEW
The brokerages forecasting a loss say excess channel inventory may result in a decline in the company's sales volumes in the June quarter. Further, the delayed monsoon has affected demand in India and weak demand from Europe, North America, and Latin America is likely to keep revenues under pressure despite the price hikes implemented by the company.
Demand from Europe remains weak due to heatwaves and low pest infestation while demand from North America and Latin America is affected by seasonality. The India business is expected to grow mainly because of pricing. "We expect volume growth to come under pressure, mitigated by 10% yoy (year-on-year) depreciation in the USD-INR (rupee vis-a-vis the dollar) and price hikes taken to pass along higher input costs," Kotak Securities Ltd. said. Latin America is the company's largest market, accounting for 37% of total revenues, followed by the rest of the world at 21%, Europe at 16%, North America at 14%, and India at 12%, according to UPL's recent annual report.
However, PhillipCapital expects UPL to report a profit, supported by stronger pricing, favourable currency movement, margin expansion, and the low base of last year. The brokerage also expects resilient performance from its subsidiary Advanta Enterprises Ltd. to support earnings. Advanta is UPL's global seeds business, which develops and sells hybrid seeds for crops such as corn, rice, sunflower, and vegetables.
The agrochemical major's revenue growth is expected to be driven by price hikes and favourable currency movement, according to analysts. A weaker rupee, which depreciated 1.2% in Apr-Jun, is also expected to support revenues as UPL derives a significant share of its sales from overseas markets.
The company's earnings before interest, taxes, depreciation, and amortisation are expected at INR 14.84 billion for the June quarter, according to the average of four estimates. The highest estimate is INR 15.10 billion from Motilal Oswal and the lowest is INR 14.22 billion from Kotak. The company had reported an EBITDA of INR 13.03 billion for the year-ago quarter.
UPL will detail its June quarter earnings Monday. Friday, shares of the company ended at INR 604.30 apiece on the National Stock Exchange, up 0.3% from Thursday. The stock is down nearly 10% since the company reported its March quarter results.
Of the six brokerage reports on the company available with Informist, three have a "buy" recommendation on the stock with an average target price of INR 892. This is nearly 48% higher than the current market price. Three brokerages have a "hold" rating on the stock with an average target price of INR 753.
The following are the June quarter earnings estimates for UPL from five brokerages, in descending order of the estimate of net profit, in INR billion:
|
Brokerage |
Net Sales |
Net Profit |
EBITDA |
|
PhillipCapital (India) Pvt. Ltd. |
104.40 |
1.87 |
15.03 |
|
360 ONE Capital Market Pvt. Ltd. |
101.57 |
0.071 |
-- |
|
Motilal Oswal Financial Services Ltd. |
99.30 |
-0.1 |
15.1 |
|
Kotak Securities Ltd. |
99.83 |
-1.02 |
14.22 |
|
Nuvama Wealth Management Ltd. |
102.29 |
-3.53 |
14.96 |
|
Average |
101.48 |
NA |
14.83 |
End
Edited by Shubhayan Bhattacharya
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