UPL Ltd - global agrochemical company

The company has denied this as a rumor when it was first flashed in news channels. Meanwhile, they announced a buy back through the market route and in a week’s time the promoters have already accumulated 600K shares. The debt levels are still high and merger with a larger company can’t be ruled out.

Disc: Invested and waiting for a good price to exit




The Company came out with its buy back plan wherein they proposed to buyback equity shares of the company through open market rate for a total amount of Rs 1,100 crores upto a maximum purchase price of Rs 875/share. The Company posts a daily update on the amount of shares it bought back through both exchanges and also the average price of the shares bought that day and then the cumulative figures of the buyback programme. What struck me as odd was that as the share price decreases the company (or the appointed merchant banker or whoever) buys less and vice versa. Whereas as per common sense the money deployed in a day should increase when the price of the stock moves south. Below is a tabular presentation of the summary of all the daily disclosures :

Total money allocated for buyback 11,00,00,00,000
Date BSE NSE Total shares Avg price Money spent Money left
07-Apr-22 1,20,000 - 1,20,000 803 9,63,97,439 10,90,36,02,561
08-Apr-22 30,000 69,900 99,900 810 8,08,99,495 10,82,27,03,067
11-Apr-22 4,00,000 6,00,000 10,00,000 816 81,60,49,040 10,00,66,54,027
12-Apr-22 2,60,000 5,60,000 8,20,000 808 66,28,08,485 9,34,38,45,542
13-Apr-22 65,000 2,35,000 3,00,000 819 24,58,44,039 9,09,80,01,503
18-Apr-22 1,40,000 2,60,000 4,00,000 803 32,11,90,988 8,77,68,10,515
19-Apr-22 2,03,897 3,67,502 5,71,399 814 46,52,80,298 8,31,15,30,217
20-Apr-22 1,34,000 2,82,000 4,16,000 814 33,86,73,475 7,97,28,56,743
21-Apr-22 1,10,000 2,40,000 3,50,000 827 28,93,36,327 7,68,35,20,416
22-Apr-22 2,82,811 4,00,000 6,82,811 817 55,78,66,768 7,12,56,53,648
25-Apr-22 860 13,154 14,014 795 1,11,45,929 7,11,45,07,719
26-Apr-22 - - - 813 - 7,11,45,07,719
27-Apr-22 2,623 - 2,623 796 20,87,908 7,11,24,19,811
28-Apr-22 4,40,000 5,60,000 10,00,000 818 81,83,74,080 6,29,40,45,731
29-Apr-22 3,00,000 10,46,534 13,46,534 825 1,11,05,91,000 5,18,34,54,731
02-May-22 4,63,289 9,55,396 14,18,685 829 1,17,57,33,151 4,00,77,21,580
04-May-22 2,50,000 7,50,000 10,00,000 832 83,17,77,280 3,17,59,44,300

Here we can clearly see that when the stock was at its lowest i.e. on 25th and 27th respectively then only an amount of Rs 1.32 crores approx was spent on buying back shares whereas apart from these two days the Company regularly buys shares north of Rs 55 crores. What sense does it make? Has this got something to do with the commission of the merchant banker? Would appreciate if some finance industry person can so throw some light on this.

Below is another chart to show this data graphically

Hoping for a response. Thanks!

Disclosure : Invested


Decent results for Q4.

  1. Q4- YoY growth: Revenue + 26 % (Driven by 3% volume, 21 % price hike, 2 % Fx), EBITDA Margin 23%vs 22%
  2. Fy22 vs Fy21: 19% revenue growth( volume +8%, price +10%, 1 % Fx), EBITDA Margin constant at 22%
  3. Raised a Green Bond with 35 bps lower interest rate, which can further reduce by 5 bps on meeting sustainability targets, more Green finance initiatives planned
  4. New product (<5 yr old) revenue : 21 %
  5. Fy23 Guidance 10 % revenue growth, 12-15 % EBITDA growth.
    Investor PPT
    Disc: Invested with a significant allocation

If you don’t mind, I would very much like to hear your investment rationale. For me, UPL seems to have made the leap from a generics player (post patent products) to
an innovator. Some new stuff, they are working on appears very future-proof. On the negative side, the debt overhang and modest growth (10% guidance), muted return ratios in the short term have dow rated it. The cash flows are far and out much better compared to others in the ag Chem space (whose earnings carry 3x to 4x rating).
Disc - invested at around 800 level.

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I have been invested for a few years. Key points in favor when the decision was made, and which have continued, prompting me to hold and add whenever valuations have looked reasonable:

  1. UPL has consistently grown faster than market for a long time, and that is a trait I value a lot. It shows ability of management to think differently that peers, this has helped me well in my other investments like Persistent.
  2. Focus on new product development and stated targets on revenue from new products
  3. Reasonable valuations
  4. Agri chem industry is in a sweet spot, years of low growth and investments have created a lot of vendor consolidation, and Agri product prices are rising, increasing farmers propensity and ability to use these products. The price hikes taken by UPL this year are a clear indication of this, and I would not be surprised to see some more hikes in the coming year.


  1. Debt (is reducing steadily though), and the poor handling of communications like the Auditor change.
  2. Second major fire in recent times in major plants. Looks like safety standards are not as good as they need to be.

ICICI maintains accumulate target 858
fb191787b4f74470a7150a79936bf6f3-10052022.pdf (392.3 KB)

Is it a marketing strategy before sell-off?

Better than expected results from UPL Ltd.

Disc : invested, biased



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All the positives like worldwide diversification, push into value added products like NPP, synergy with acquired Company etc on the one hand are being weighed against the huge debt, rising interest rate, potential global recession, bloating in work capital and currency weakening against the USD.

Also UPL has guided higher and any negative earnings surprise will weigh this down further along with FII selling of Indian equities.

My personal bet is that UPL will manage it’s debt eventually, may be acquired which will EVENTUALLY lead to rerating. However market has written off UPL until it gets to a comfortable DE ratio.

DISCLOSURE - Invested at 750 avg price, underwater, but aim to hold for long time.
I am a confirmed IDIOT. Words are not recommendations


It is hardly as bad as the market makes it out to be. Trading at P/E lower than its 10yr average is just unseemly. Almost feels like a bear cartel is at works here.
D/E story has been pushed since the Arysta acquisition as if the group would go bankrupt. Nothing bad happened, they have managed their debt well. Then the whistleblower and brouhaha about rent paid on some properties in Bandra that broke in 2020. And now, all the hand wringing on inflation and recession and receivables in Brazil