UPL Shares Dip 5% as Tepid FY26 Guidance Undermines Strong Q4 Earnings

Shares of agro-chemical company UPL fell as much as 5% on the National Stock Exchange by 12:01 PM today due to an underwhelming revenue and EBITDA growth guidance for the ongoing financial year. Subdued outlook outweighed any relief due to a steep rise in the company’s earnings for the March quarter.

UPL expects its revenue to grow 4-8% and EBITDA to grow 10-14% in FY26. Although the guided figure for revenue growth is in similar range as FY25, the EBITDA for the ongoing financial year is seen growing at a slower rate compared to a 50% growth guided for FY25. However, the chemical company fell short of meeting the EBITDA growth estimate for FY25 and instead ended the year with a 47% growth in the metric.

Meanwhile, it managed to outperform the expectations for free cash flow generation as it generated $530mn in FY25 compared to the guided figure of $300mn-$400mn. Apart from this, it also managed to cut its net debt by $1bn in one year to $1.6bn, according to UPL’s investor presentation.

UPL’s consolidated net profit for the March quarter spiked over 22 times on year to Rs 896 crore. This was achieved primarily on the back of an 11% on year increase in consolidated revenue for the period. A 5% reduction in input cost for the said period also aided the company’s earnings. The company has also announced a dividend of Rs 6 per share for its shareholders post the results.

A recent announcement by China had earlier spooked investors. China announced a safeguard duty on imports of the insecticide 'cypermethrin' from India, following a year-long investigation. This came into effect on May 7. The anti-dumping duty levied was in the range from 48.4% to 166.2%, applicable for five years.

On Monday, the stock touched its 52-week high mark on the National Stock Exchange. The stock has risen over 20% in the last one year, while so far in 2025, it has gained over 28%.

Elara Securities has retained its 'accumulate' rating on the stock, but raised the target price to Rs 749 from Rs 664. Going forward, the industry growth might be led by volume due to large agro-chemical supplies from China at subdued prices, the brokerage said. The company's aggressive reduction in its cost structure and is likely to continue in FY26 as well, it further added.