UPL share price jumps 26% YTD while Nifty 50 declines 3%; is it a stock to buy?

UPL share price climbed nearly 1.5 per cent on Thursday, February 13, extending gains to the second consecutive session, outperforming the equity benchmark Nifty 50, which fell for the seventh consecutive session.

UPL shares have seen stellar gains this year, defying weak market sentiment. Year-to-date (YTD), the stock has surged 26 per cent, while the Nifty 50 has declined nearly 3 per cent.

The fertilizer stock hit a 52-week high of ₹649.45 on February 5 this year and a 52-week low of ₹430.58 on March 14 last year.

On a monthly scale, the stock has climbed over 4 per cent against a nearly 21 per cent jump in January. The Nifty 50 has been in the red since October.

UPL Q3 result

UPL, on January 31, reported a consolidated net profit of ₹828 crore for the December quarter of the current financial year (Q3FY25). It had reported a loss of ₹1,217 crore in the same quarter last year.

Revenue from operations of the company rose 10 per cent during the quarter under review to ₹10,907 crore against ₹9,887 crore in the same quarter of the previous year. According to the company’s exchange filing, revenue growth was driven by a 9 per cent increase in volumes, a 5 per cent increase in price and a 4 per cent decline due to forex, mainly in Brazil.

EBITDA surged 420 per cent year-on-year to ₹2,163 crore from ₹416 crore in Q3FY24, while EBITDA margin soared 1,560 bps to 19.8 per cent from 4.2 per cent.

“We are seeing a strong bounce back compared to last year, with normalisation of business and recovery of volumes and prices. This has helped regain our contribution margins to our previous higher levels. Through strong focus, the team has done a commendable job bringing down the working capital, significantly reducing our net debt versus September 2024. With this strong performance, we are confident we can deliver our EBITDA and free cash flow guidance for the full year,” said Jai Shroff, Chairman and Group CEO of UPL.

UPL: A stock to buy?

The recent gains in the stock could be attributed to the company’s better-than-expected quarterly numbers and healthy growth outlook.

Experts appear positive about the stock due to healthy fundamentals.

Prathamesh Masdekar, a research analyst at Stoxbox, underscored that UPL demonstrated healthy operational performance during the quarter and remains optimistic about its performance for the remainder of FY25, aided by strong revenue growth and improved operational efficiency.

“The company sees FY25 as a year of recovery in the global crop protection market, with demand stabilising across key regions. With channel destocking fading, UPL expects a normalized ordering pattern and a balanced supply chain between dealers, distributors, and farmers,” said Masdekar.

“The company also focuses on its differentiated and sustainable product portfolio, driving higher margins through innovation and customer engagement. The natural plant protection (NPP) business is gaining momentum, with strong adoption of bio-stimulants and biocontrol solutions, particularly in markets like Brazil and Europe,” Masdekar added.

Masdekar highlighted that the company has significantly reduced net debt and improved working capital management, reinforcing its target of achieving $300 million to $400 million in operating free cash flow (FCF).

“UPL expects to achieve its full-year 50 per cent EBITDA growth guidance, aided by new product launches, cost optimisation, and sustained demand recovery. With a buoyant market strategy and strengthened financial position, it is well-positioned for profitable growth in the upcoming quarters,” said Masdekar.

The proposed anti-dumping duty on imports of Glufosinate and its salt from China is a near-term catalyst for the stock.

“Ministry of Commerce and Industry, in its final finding on February 10, 2025, recommended imposing anti-dumping duty on Glufosinate and its salt from China. It is positive for UPL, which is a major producer of Glufosinate in India. Glufosinate is a herbicide widely used for major crops such as corn, soybeans, and cotton,” said Rohit Sinha, Senior Analyst at Sunidhi Securities and Finance Limited.

Technical view on UPL

Hardik Matalia, a derivative analyst at Choice Broking, underscored that UPL is maintaining a strong uptrend driven by consistent bullish momentum. The stock has recently broken past key resistance levels, attracting significant buying interest and signalling a shift in market sentiment. The breakout reflects renewed investor confidence, with buyers overpowering sellers, leading to sustained price appreciation.

The stock is trading well above its 20-day, 50-day, and 200-day exponential moving averages (EMAs), reinforcing its bullish outlook. This alignment indicates a well-established uptrend, where short-term momentum remains strong while the broader trend supports further gains.

“On the downside, immediate support is placed at ₹615, providing a cushion in case of minor pullbacks. The Relative Strength Index (RSI) stands at 65.60 and is trending upwards, reflecting growing buying momentum. To manage risk effectively, a stop loss at ₹608 is recommended to protect against potential market reversals,” Matalia said.

“If UPL breaks above ₹640, it could trigger a further rally towards the ₹700 mark, supported by strong technical indicators and sustained demand at higher levels. With the stock maintaining its bullish trajectory, investors and traders should closely monitor the price action for potential upside continuation,” Matalia said.

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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.