UPL Shares Rise The Most In Six Years On Debt Reduction
Farmers spray insecticides in an agricultural field in India. (Photographer: Prashanth Vishwanathan/Bloomberg)

UPL Shares Rise The Most In Six Years On Debt Reduction

Shares of UPL Ltd. rose the most in six years after the maker of agrochemicals said it expects debt to reduce by 31 percent quarter-on-quarter in the three months ended March.

The company expects its debt at $2.9 billion as on March 31, down $900 million from a year earlier and $1.3 billion since December, according to its exchange filing.

That’s a more than Rs 9,400 crore in a quarter, higher than what the street anticipated. Jefferies in a report released today said it expected UPL’s overall debt to fall by Rs 2,300 crore in the entire 2019-20. The debt had risen after the acquisition of Arysta LifeScience.

UPL shares surged as much as 19 percent on Thursday, the biggest intraday jump since April 2014. That compares with a 3.4 percent rise in the benchmark Nifty 50 as of 3:15 p.m. The stock had tumbled 39 percent year-to-date prior to the announcement, tracking the equity selloff as the Covid-19 pandemic restricted movement of goods and workforce, restricting global supply chains.

UPL said demand for crop protection products remained robust as the farming season continues to be normal across the world.

30 of the 34 analysts tracked by Bloomberg remain bullish on the stock, with the average of 12-month target price estimates at Rs 582 apiece—a potential upside of 41 percent.

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