25 August 2026, Mumbai: Global brokerage Jefferies has maintained its ‘Buy’ rating on UPL with a target price of Rs 715, following a meeting with the company’s senior management. The brokerage said UPL remains confident of delivering its 10–14% full-year growth guidance, with second-quarter growth expected to be broadly in line with the guidance.
UPL expects year-on-year volume growth across all four businesses in Q2, supported by a strong showing in crop protection in India, Africa and the US, along with continued double-digit growth in Advanta. The second quarter is also expected to benefit from a foreign exchange translation tailwind.
Jefferies projects 14% year-on-year EBITDA growth for UPL in FY27, with the company expecting EBITDA margins to improve through the rationalisation of unprofitable products, geographies and joint ventures or associates. Crop protection margins are expected to improve, while Advanta’s margins are projected to remain broadly flat year-on-year at around 25%.
UPL is also maintaining tighter control over inventories in Latin America amid concerns over a potentially stronger El Niño. Unlike in the past, the company is discouraging advance sales to cultivators ahead of the season to limit potential inventory returns in the event of a more severe El Niño. Jefferies also noted that a correction in commodity prices following a potential de-escalation of the Middle East conflict could pose a risk of inventory losses.
Advanta investments and IPO
UPL said it is stepping up investments in Advanta after prioritising balance-sheet deleveraging during FY25–26. The company plans to invest in new geographies and distribution, with management expecting strong double-digit revenue and EBITDA growth in the business in FY27.
UPL recently acquired Misr Hytech Seeds in Egypt for US$110 million. According to management, the acquisition comes with an IRR in the 30% range and will help in penetrating the African market. Misr Hytech has a 55% share of corn and a 25% share of sorghum in Egypt.
The company received SEBI approval for the Advanta IPO in June 2026 and intends to start marketing the issue soon. Management is optimistic about value unlocking given the faster growth and higher profitability of the business.
Jefferies is building in 50 basis points of year-on-year EBITDA margin expansion for UPL in FY27, while highlighting the risk from a strengthening El Niño.
UPL’s stock has corrected 28% year-to-date in calendar 2026. Jefferies values UPL at 14 times June 2028 estimated forward P/E, in line with its long-term average, and has maintained its ‘Buy’ rating with a target price of Rs 715.
Disclaimer: This report is based on a summary of Jefferies’ views shared with Global Agriculture. The views, estimates and price target mentioned above are those of Jefferies.
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