UPL’s Shares Jump To A Record High As Analysts Up Price Targets After Q4

Workers sprays weed killer on plants at a soya bean farm in Dewas, Madhya Pradesh, India. (Photographer: Prashanth Vishwanathan/Bloomberg)

UPL’s Shares Jump To A Record High As Analysts Up Price Targets After Q4

Shares of UPL Ltd. jumped to their highest ever as brokerages raised their earnings estimates and price targets for the agrochemical maker citing new launches and higher crop prices, among others.

Revenue for UPL rose 40% quarter-on-quarter to Rs 12,796 crore in the three months ended March, according to an exchange filing. That was aided by a strong performance in key markets of Latin America, India and Europe. Its net profit also rose over the preceding quarter, but margin contracted.

UPL’s stock jumped more than 10%—the most since Feb. 24—to trade at a record high of Rs 758 apiece around 1 p.m. on Friday. The stock, however, pared some of its gains to end 7.41% higher. Of the 35 analysts tracking the company, 32 have a ‘buy’ rating, two suggest a ‘hold’ and one recommends selling the stock, according to Bloomberg data. The average of the 12-month consensus price targets implies an upside of 9.3%.

Also read: UPL Q4 Results: Profit Rises 34% On Higher Volumes

Here’s what analysts made of UPL’s Q4 performance...

Morgan Stanley

  • Rates ‘overweight’, raises target price to Rs 832 from Rs 426 apiece.
  • “We see a strong macro backdrop for crop protection — rise in acreages and agri commodity prices.”
  • UPL’s positioning on differentiated and sustainable products should drive share gains and stronger earnings growth.
  • UPL has an innovative pipeline of differentiated products and will also benefit from its recent strategic tie-ups. For the sustainable products portfolio, the strategy revolves around accelerated adoption of biostimulants, creating new biologicals, and expanding on ProNutiva offerings.

Jefferies

  • Maintains ‘buy’ rating, raises target price to Rs 800 from Rs 655 apiece.
  • Globally, a rise in crop prices is likely to boost farmer income, auguring well for UPL (potential price hikes).
  • Factoring Q4 beat, strong crop prices, deleveraging, positive management commentary and guidance, the research firm raises FY22-24 earnings by 17-20%.
  • Key risks include global disruption, delay in Arysta synergies, pricing pressures.

CLSA

  • Maintains ‘buy’ rating’, hikes price target to Rs 900 apiece from Rs 740.
  • India was the standout region with 23% year-on-year growth, helped by favourable weather and new launches.
  • Strong agronomic conditions leads to 4-5% upgrade in EPS estimates.
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