Stock Market Today: UPL share price scaled its 1 year of 52-week high extending post-Q3 results rally for third straight session on Monday. Stock gained more than 5% during intraday trades
UPL share price opened at ₹607.05 on the BSE on Monday, slightly higher than the previous closing price of ₹604.30. The UPL share price thereafter gained more than 5% during intraday trades to scale 52 week or 1 year high of ₹636.45.
The UPL Q3 results were declared on 31st January and the share price has gained more than 11% ever since in last 33 sessions.
The recent gains are being supported by Q3 Results performance and also the Budget proposals to boost agriculture sector
The UPL share price is on an uptrend and has gained more than 26% since November lows.
UPL Q3 Results
Revenue for the third quarter for UPL was up by 10%, driven by 9% increase in volumes, 5% increase in price and 4% decline due to forex , mainly in Brazil.
The Net profit at ₹828 Crore was not comparable to year ago quarter as it had included one-offs which led UPL report ₹1,217 crore loss
However the favorable is the rise in profitability. Contribution margin increased led by product mix, rebate normalization and COGS improvement, said the company. Hence UPL Earnings before Interest tax depreciation and amortisation at ₹2,163 crore increased 420% over the ₹416 crore in the year ago quarter.
Strong performance with accretive margins in differentiated and sustainable segment helped as per the company
The performance also remained strong in seeds business, driven by grain sorghum, sunflower and corn.
Debt reduction
As Debt remains a key factor to watch when it comes to UPL, Net Debt decreased by $745 million versus last year.
Analyst upgrade UPL
Rohit Nagraj Research analysts at B&K Securities said that the company did a commendable job in reducing working capital by a sizeable margin leading to significant debt reduction on a YoY basis.
Nagraj said that UPL’s 3Q performance provided confidence on its business recovery and more importantly its efforts to reduce working capital and debt reduction. Management reiterated its expectation of continued momentum in 4Q and is well on its path to reducing its end FY25 debt to achieve a net deb to EBITDA ratio of 2.0x. Hence, we have become optimistic on UPL and raise our P/E multiple from 12x earlier to 15x. Thus, we upgrade the stock from Sell to Hold with revised target price of ₹672 compared to ₹406 earlier
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
