UPL Ltd
UPL is principally engaged in the business of agrochemicals, industrial chemicals, chemical intermediates, speciality chemicals and production and sale of field crops and vegetable seeds.
Revenue Breakup
Crop Protection– 84%
Seed Business-11%
Non- Agro– 6%
Shareholding Pattern
-PUBLIC GROUP
-PROMOTER GROUP
Financial Summary
| Particulars | Mar 2022 | Mar 2023 | Mar 2024 |
| Sales | 46,240 | 53,576 | 43,098 |
| Sales Growth % | 19.50% | 15.87% | -19.56% |
| Expenses | 36,711 | 43,380 | 38,801 |
| Operating Profit | 9,529 | 10,196 | 4,297 |
| OPM % | 21% | 19% | 10% |
| Net Profit | 4,437 | 4,414 | -1,878 |
| EPS in Rs | 42.18 | 42.28 | -14.21 |
Synopsis of Financials
- Revenue for the last year stood at INR 43,098 crores, showing a 20% decline.
- EBITDA was INR 5,500 crores, down by 51%.
- Debt increased by $600 million and working capital increased by 22 days.
- Net debt increased to $2.66 billion.
- Net loss reported for the year was INR 1,200 crores.
Final Outlook
Risks:
High Debt: A significant debt burden could constrain financial flexibility, especially in a high-interest rate environment.
Profitability Pressure: Margins have been shrinking due to fluctuating raw material costs and global macroeconomic challenges.
Valuation Concerns: A P/E ratio of 28.1 suggests overvaluation compared to peers, despite operational headwinds.
Support and Resistance Levels:
Immediate Resistance: Around ₹560–₹570. This area aligns with previous price action and is marked as a horizontal resistance zone. A breakout above this level could lead to a move toward the ₹590–₹600 zone.
Strong Resistance: The ₹620–₹630 area represents a key zone where the stock faced rejections in the past, visible at the top of the chart.
Immediate Support: The ₹530–₹540 level (aligned with the 20-EMA and 9-EMA) is acting as a short-term support zone.
Key Support: Around ₹498, which aligns with the recent swing low.
What to Watch:
A breakout above ₹570 with strong volume could push the stock toward ₹590–₹600 in the near term.
A failure to hold ₹530 could trigger further downside, potentially retesting ₹498.
UPL is a strong player in the agrochemical sector with global operations and a focus on sustainable products. However, its high debt levels and declining profitability raise red flags. The stock appears overvalued relative to its fundamentals, and any investment would need careful monitoring of its debt reduction strategies and margin recovery.
I will give sell recommendation for this stock.
UPL-Ltd