Home » Core Investor Group » UPL Ltd – Q1FY26 Result Update
Sector Outlook: Neutral
Steady operational performance despite challenging environment
The company posted a revenue increase of 1.6% YoY / down 40.8% QoQ to Rs. 92,160 mn, below market expectations of Rs. 106,060 mn. The Revenue growth was modest for the quarter, driven by a 1% price increase and favourable forex impact. UPL reported an annual revenue increase in international geographies such as North America (+24%) and India (+21%), which had a strong performance. However, Latin America (-10%), Europe (-6%) and ROW (-10%) regions declined during the quarter. EBITDA increased 26.8% YoY / down 56.3% QoQ to Rs. 13,960 mn, while EBITDA margin stood at 15.1% (up 300bps YoY) in Q1FY26, owing to improved product mix, better pricing, higher capacity utilisation, and lower input costs. The company reported a financial loss for Q1FY26, at Rs. 176 crores, marking a sharp improvement from losses of Rs. 528 crores, respectively, in the prior year. The loss was driven by specific cost and market factors, partially offset by higher EBITDA and lower finance costs.
Valuation and Outlook
UPL Ltd has reported steady operational performance during the quarter, driven by revenue growth and improved operational performance. The company has reiterated its FY26 guidance of 4–8% revenue growth and 10–14% EBITDA growth, with management indicating that growth will be margin-led and skewed towards the second half of the year. The company expects to benefit from a strong order book, especially in Latin America, for Q2 onwards, improved product mix, higher capacity utilisation, and cost efficiencies, which should sustain the contribution margin gains seen during the quarter. New product launches remain a key growth lever, with ~$130 million in additional revenues targeted for FY26, primarily in H2FY26. Regional performance is expected to improve, led by a recovery in LATAM, continued robust demand in North America and Europe, and healthy traction in India crop protection, seeds (Advanta), and specialty chemicals (SUPERFORM). Management remains cautiously optimistic for Q2FY26, maintaining focus on deleveraging, disciplined working capital, and operational excellence. Strategic reviews are underway to explore unlocking value across platforms, with an emphasis on sustaining long-term growth visibility.
Key concall Highlights
UPL expects a strong recovery in Latin America from Q2FY26, following Q1 revenue declines due to insecticide pricing pressure in Brazil and product phasing. Growth will be driven by a strong order book, improved efficiencies, and better customer engagement. In North America, momentum continues with strong in-season demand and low inventories, especially in herbicides, mancozeb, and acephate. Europe remains positive with growth led by key herbicides and fungicides, despite weather challenges. UPL’s Sustainable Agri Solutions segment grew on the back of 9% volume and 4% pricing gains, aided by new launches and rising rural demand. Advanta Enterprises saw 12% volume growth in corn, grain sorghum, and sunflower, with margins expected to recover from Q2. UPL maintains FY26 guidance of 4–8% revenue and 10–14% EBITDA growth, with stronger H2 performance expected from Latin America, $130M in new product launches, insecticide recovery, and ongoing cost and working capital efficiencies supporting long-term growth.
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