UPL reported an 11% rise in consolidated revenue in the first quarter of FY27, supported by favourable currency movements and higher realisations, although volumes declined 3%.
Revenue growth was broadly balanced across its three key businesses – Advanta, Superform and global crop protection. Gross margin improved by 285 basis points year-on-year to 57.6%, helped by product mix and pricing.
The company expects revenue to grow 7-11% in FY27, with EBITDA growth of 10-14%. Management said growth over the next three quarters is expected to be primarily volume-led. It also reiterated its medium-term goal of reducing net debt to below 1.5 times EBITDA.
In the crop protection business, Latin America revenue increased 5%, driven by stronger herbicide and insecticide sales in Brazil. Growth in Brazil offset weaker demand in Colombia and Argentina. Europe recorded 2% growth despite heatwave-related pressure on herbicide and natural plant protection products, while North America grew 11%, supported by demand for herbicides and fungicides.
Advanta, UPL’s seeds business, recorded about 25% growth in revenue and EBITDA. Growth was supported by volumes, pricing and currency movements, with its corn portfolio gaining traction in India, Latin America and Indonesia. Sunflower seeds also saw stronger demand in Argentina.
Superform’s overall volumes declined 2%, although its specialty chemicals business recorded 51% volume growth, driven by demand from lubricant, paints and flame-retardant applications. Higher overheads, however, led to a 70-basis-point decline in its EBITDA margin.
UPL also said Mike Frank, chief executive of its global crop protection business, has resigned for personal reasons.
Analysts expect UPL’s diversified product pipeline across crop protection, seeds, chemicals and natural plant protection to support growth. Following a recent decline in the company’s share price, the brokerage has upgraded its rating to Buy from Accumulate, while retaining its target price of Rs 783.
