UPL Limited Delivers Robust Q2 and H1 FY26 Results, Upgrades FY26 Guidance

Key Financial Highlights

• Revenue Growth: UPL reported consolidated revenue of ₹12,019 crore for Q2FY26, up 8% year-on-year, and ₹21,235 crore for H1FY26, up 5% year-on-year. This growth was driven by strong volumes in UPL Corp and Advanta, partially offset by challenges in UPL SAS.
• EBITDA Expansion: EBITDA surged 40% in Q2FY26 to ₹2,205 crore and 29% in H1FY26 to ₹3,508 crore. EBITDA margins improved significantly, reaching 18.3% (+410 bps) for the quarter and 16.5% (+300 bps) for the half-year.
• PATMI Turnaround: UPL achieved a remarkable turnaround in profitability, with Q2FY26 PATMI at ₹553 crore (up ₹996 crore vs last year) and H1FY26 PATMI at ₹465 crore (up ₹1,292 crore vs last year). This was driven by broad-based EBITDA growth, lower finance costs, and favorable foreign exchange movements.
• Balance Sheet Strengthening: Net debt reduced by over ₹3,700 crore (>\$600 million) versus last year, with net debt to EBITDA ratio improving to 2.7x from 5.4x. Net working capital days improved by 5 days year-on-year, reflecting tight financial discipline.
• Cash Flow: Free cash flow to equity, adjusted for working capital seasonality, improved by more than ₹1,900 crore year-on-year, underscoring strong operational discipline.

Strategic and Corporate Developments

• Corporate Realignment: Successful integration of DECCO (post-harvest business) with Advanta, enhancing the group’s seed and post-harvest portfolio.
• Rights Issue: Final call of \$200 million received in September 2025, further strengthening equity base.
• Ratings Upgrade: All three global ratings agencies (S&P, Fitch, Moody’s) upgraded UPL’s outlook from “negative” to “stable,” a reflection of strong recovery and improved financial metrics.
• Perpetual Bond Redemption: Significant capital deployment with redemption of perpetual bonds in May 2025, impacting cash balances but improving balance sheet structure.

Business Segment Performance

UPL Corp

• Q2 revenue up 12% to ₹8,625 crore; contribution margin up 410 bps to 35.1%.
• EBITDA margin expanded to 14.6% (+490 bps), led by strong volume growth in North America and Latin America, and improved cost efficiencies.
• Americas showed robust recovery, especially in Argentina (herbicides, corn, sunflower) and Brazil (mancozeb fungicides).

UPL SAS (India Crop Protection)

• Q2 revenue was impacted by unfavorable weather, down 10% year-on-year, but contribution margin improved 500 bps to 35%. EBITDA margin also rose to 22.7% (+270 bps).
• Maintained profitability through improved product mix and new launches (Centurion EZ, Canora EZ).

Advanta (Seeds and Post-Harvest)

• Q2 revenue up 26% to ₹1,669 crore, driven by field corn and sunflower in India and Argentina.
• EBITDA margin leapt to 25.7% (+510 bps), indicating strong operating leverage from scale and product mix.
• Decco’s integration contributed to robust H1 growth.

SUPERFORM (Specialty Chemicals)

• Q2 revenue flat at ₹2,799 crore, but EBITDA up 24% to ₹380 crore, margin up 250 bps to 13.6%.
• Super Specialty Chemicals (SSC) segment led growth (+18% YoY), with non-agchem share increasing to 25%.

Operational and R&D Excellence

• Manufacturing: UPL operates 43 global manufacturing facilities with advanced synthesis capabilities, significant backward integration, and a focus on operational excellence and sustainability.
• R&D: Strong innovation pipeline, with over 3,000 patents granted, 262 R&D employees, and dedicated teams for process optimization, sustainability, and technology development. R&D efforts are targeted at agchem, specialty chemicals, and emerging sectors like pharma and energy storage.
• Sustainability: UPL has achieved significant reductions in water consumption, carbon emissions, and waste disposal, and increased renewable energy usage, earning global recognition and awards for safety and sustainability.

FY26 Upgraded Guidance: Key Shareholder Information

• Guidance Upgrade: UPL has raised its EBITDA growth guidance for FY26 to 12–16% (from 10–14%) while maintaining revenue growth guidance at 4–8%. This reflects management’s confidence in ongoing recovery, margin accretion, and operational momentum.
• Financial Discipline and De-gearing: The significant reduction in net debt and improved gearing ratios are strategically important and may positively impact shareholder value, credit profile, and cost of capital.
• Shareholder Returns: The rights issue and PATMI turnaround position UPL for potential capital return opportunities, dividend growth, and higher valuation multiples.
• Credit Rating Upgrade: The shift from “negative” to “stable” outlook could result in lower borrowing costs and improved market sentiment.
• Price Sensitive Information:
  • The upgraded guidance, ratings improvements, and turnaround in profitability are all material events that could positively influence UPL’s share price.
  • Successful integration of acquisitions, improved margin profile, and ongoing de-gearing are likely to be viewed favorably by investors.

Conclusion

UPL Limited’s Q2 and H1 FY26 results demonstrate a strong recovery across all business segments, with significant improvements in profitability, operational discipline, and balance sheet strength. The upgraded FY26 guidance, ratings outlook improvements, and strategic integration of business units are all highly relevant for shareholders and may positively impact share valuations.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should perform their own due diligence and consult financial advisors before making investment decisions. The financial data and forward-looking statements are sourced from UPL Limited’s investor presentation and are subject to risks, uncertainties, and changes.

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