UPL Limited
The Company
UPL Limited (UPL), formerly known as United Phosphorus Limited, is an Indian multinational agrochemical company headquartered in Mumbai, with a legacy of over five decades. The company is world’s 5th largest and India’s leading crop protection enterprise. It manufactures and distributes crop protection products, intermediates, specialty chemicals, and other industrial chemicals. Its product portfolio includes insecticides, herbicides, fungicides, plant growth regulators, and bio-solutions. UPL has a product portfolio comprises over 1500 formulations and nearly 1,500 patents.
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UPL has several strategic acquisitions and alliances to diversify its product collections and expand its global reach. The company is divided into two entities such as International Crop Protection (UPL Corporation, Cayman) and India Crop Protection. Presently, UPL has footprint in almost 140 countries across the globe, comprises over 200 entities, including UPL NA Inc (US), UPL Europe Ltd (UK), and UPL Agro SA DE CV (Mexico), etc. UPL’s manufacturing units are in India, France, Argentina, the UK, Vietnam, Turkey, Brazil, the USA, China, Thailand, Italy, Australia, and Colombia. UPL’s other platforms include Advanta Seeds, UPL Sustainable Agri Solutions, and Superform Chemistry Limited.
The Company’s Strengths
UPL is a global leader in crop protection solutions, with a wide range of products, including herbicides, fungicides, insecticides, acaricides, seed treatments, adjuvants, and biosolutions. Its ProNutiva program integrates natural plant protection with conventional methods, ensuring sustainable farming. Its broad product portfolio includes innovative, IP-protected solutions, with over 30% of its current lineup under intellectual property rights.
With its diverse product portfolio, UPL serves all major crop segments from sowing to post-harvest. In short, UPL’s presence across the crop lifecycle—from seeds and seed treatments to pre- and post-harvest solutions—strengthens its resilience to market fluctuations.
It is India’s largest agrochemical company, though the country accounts for less than 15% of its revenue. Having presence across Latin America, Europe, and North America, UPL generates approximately 70% of its revenue from these regions, reducing dependency on any single market.
UPL has established market leadership, with a robust presence in high-growth markets and a strong dealer and distribution network. The company is among the top players in the global BioSolutions market, ranking first or second in almost 15 countries around the world.
The company’s huge investments in research and developments drive innovation, enhancing efficiency and effectiveness. UPL’s dedicated R&D centre in India plays a crucial role in developing new formulations and technologies to tackle evolving agricultural challenges. UPL has expanded significantly through acquisitions, including recent one, Arysta, further solidifying its position in the global agrochemical industry. Backward integration in raw material and power supply ensures stability and minimizes price volatility.
UPL’s business divisions focus on sustainable and cost-effective solutions, covering seeds, BioSolutions, crop protection, and agronomic services. The company’s strategic shift towards specialized platforms aims to enhance market presence and product quality while capitalizing on emerging opportunities. By prioritizing operational excellence, UPL has optimized working capital through inventory management, tighter credit controls, and improved receivable terms. The company also has a flexible, multi-product manufacturing facilities, along with a robust supply chain and distribution network, support operational efficiency and profitability.
Capex, Acquisition and Divesting
Recently, UPL secured a $350 million investment in its hybrid seeds subsidiary, Advanta Enterprises Ltd, from private equity firm Alpha Wave Global. This includes a $250 million secondary stake sale and a $100 million primary equity infusion. This marks the second global investor-backed investment in Advanta within two years. Additionally, the company is conducting a rights issue of Rs 3,378 crore. Through these initiatives, it aims to raise nearly Rs 5,500 crore to fund expansion and reduce debt.
In February 2025, UPL strengthened its presence in Brazil by increasing its investment in Origeo Comercio de Produtos Agropecuarios S.A., a joint venture with Bunge. This additional funding, made through UPL Global Ltd, UK, will support Origeo’s working capital and growth. UPL has spent Rs 1,200 crore on capital expenditure, including the acquisition of Corteva’s Dithane® brand, in the current financial year. The company expects a limited capex of Rs 1,600 crore for the next financial year, ensuring improved cash flow.
Financials Recover
UPL has announced a substantial improvement in its financial performance for the third quarter of the current financial year. Net profit for the quarter reported at Rs 828 crore, a significant recovery from last year’s Rs 1,217 crore loss. Revenue for the period grew by 10% to Rs 10,907 crore, driven by higher volumes and price increases. EBITDA surge to Rs 2,162 crore, with margins improving to 19.8% from 4.2% in the previous year.
For the 9-month period, UPL reported revenue growth of 7% to Rs 31,064 crores, driven by a 14% increase in volumes and product mix. EBITDA growth of 36% to Rs 4,884 crores, driven by higher revenue and productivity enhancement initiatives. EBITDA margins expansion of 340 basis points to 15.7%. Net loss for the period stood at Rs 259 crore vs a loss of Rs 1798 crore in the year ago period.
Balance Sheet Strengthens
After several quarters, UPL’s net debt was lower in Q3 FY25, driven by significant improvements in working capital management and the first call money from the rights issue. In November 2024, UPL Ltd initiated a Rs 3,378 crore rights issue at Rs 360 per share. The offering included 9,38,25,955 equity shares, with a Rs 358 premium for a face value of Rs 2 per share. The rights issue was highly successful, being oversubscribed twice. UPL received Rs 844 crore (25% of the issue price) in December 2024. The Rights Issue Committee also approved the first call for an additional Rs 844 crore in March, 2025.
Over the first nine months, net debt of the company decreased by $363 million, a sharp contrast to the $1.7 billion increase during the same period last year. As of December 31, 2024, cash and bank balances stood at $511 million (Rs 4,374 crore). This includes $100 million (Rs 844 crore) received from the rights issue. With a continued focus on working capital efficiency, the company remains on track to achieve $300–$400 million in operating free cash flow.
In Q3 FY25, the company’s working capital stood at Rs 13,280 crore, nearly Rs 6,000 crore lower than the previous year. This improvement was driven by tighter credit control, improved collections, and inventory optimization. Net working capital days reduced to 107 from 155, marking a 48-day improvement. Inventory days fell by 31 to 109, while payables stood at 111 days, down by 7 days. Receivables declined by 24 days to 109.
Outlook
The outlook for the crop protection industry remains mixed, influenced by evolving market dynamics, regulatory changes, and climatic uncertainties. Rising global food demand, driven by population growth and shrinking agricultural land, underscores the need for higher agricultural productivity. However, factors such as stringent environmental regulations, increasing resistance to pesticides, and fluctuating raw material costs pose challenges for pesticides and agro chemical companies. Additionally, pricing pressure due to competition and the availability of cheaper Chinese alternatives may impact profitability. Companies that invest in innovation and diversified product portfolios are better positioned to navigate these challenges and capture future growth opportunities.
Despite the ongoing industry challenges, UPL is poised for growth as it is a global leader in agrochemicals with strong operational efficiencies and robust R&D capabilities. Based on the financials of the first three quarters, the company management expect to achieve 50% EBITDA growth in FY25, driven by strong Q3 financials, tax reversals, and margin improvements. Management also foreseeing that the global crop protection market is stabilizing as dealer buying patterns normalize and channel destocking nears completion. Hence, going forward, stable active ingredient prices and process efficiencies are further improving EBITDA margins. New product launches also expected to contribute significnlt revenue in the future.
From the global front, in North America, lower crop prices and reduced acreage in key crops, along with persistent dry weather, will impact demand. However, inventory stabilization is expected to provide some relief to crop protection suppliers. Latin America faces declining agrochemical prices and high pest pressure, though Argentina and southern Brazil are set for recovery. In Europe, sustainability trends and weather patterns will shape demand, while geopolitical risks remain a concern. Overall, UPL is well-positioned to navigate industry challenges, leveraging operational efficiencies, market demand, and strategic initiatives, which are anticipated to drive sustainable growth in the near future.
Risk Factors
UPL’s products are primarily used in the agriculture sector, which is a risky industry due to unpredictable weather conditions that can affect crop yields and farmers’ incomes. This uncertainty also impacts pesticide and agrochemical companies, as fluctuating demand and crop failures can disrupt sales and profitability. The sector is also subject to stringent regulatory changes and evolving market demands. Sluggish demand and pricing pressure, exacerbated by cheap Chinese supplies, have forced industry players, including UPL, sometimes to offer rebates, which impacting profitability. The crop protection business requires high working capital. While sales occur at the beginning of the season, payments are realized post-harvest, leading to stretched receivables. Additionally, maintaining stock for global distribution adds to the financial strain, specifically for companies with strong global presence, like UPL.
Sector: Chemicals
Market Price: Rs. 648.05 as on today
FV: Rs 2/-
Stock Name: UPL Ltd
BSE Code: 512070, NSE Code: UPL
Market Cap.: Rs 51800 Cr
Book Value: Rs. 319
Segment: Agro Chemicals/ Pesticides
Incorporation: 1985
Headquarters: Mumbai, India
