Brokerages remain divided in their outlook on UPL Limited following its Q1FY26 performance, with HSBC maintaining a bullish stance on the back of recovery and balance sheet improvements, while Kotak Institutional Equities retained a sell call, citing concerns over long-term sustainability amid weak demand and rising competition.
HSBC on UPL share: Recovery and deleveraging could unlock value
Rating: Buy | Target Price: ₹775
HSBC acknowledged that Q1FY26 was muted due to challenging conditions in select markets, but noted that the company is progressing on balance sheet improvement and deleveraging.
The brokerage believes UPL is likely to enter a virtuous cycle, driven by a combination of recovery in operations and continued financial discipline. It expects this transformation to ultimately create long-term shareholder value, reinforcing its buy call.
Kotak Institutional Equities on UPL share: Positive surprise in Q1, but risks persist
Rating: Sell | Target Price: ₹520
Kotak highlighted that UPL’s Q1 performance positively surprised on gross margins, aided by selective price hikes, lower input costs, and higher plant utilization. These factors contributed to a 12% upgrade in FY2026E EBITDA estimates.
However, the brokerage raised concerns about the sustainability of these gains, warning that underlying demand softness and intensifying competition could weigh on future performance. EBITDA estimates for FY2027–28 were raised only marginally by 1–4%, reflecting a cautious medium-term outlook.
Summary of brokerage views on UPL:
| Brokerage | Rating | Target Price | Key View |
|---|---|---|---|
| HSBC | Buy | ₹775 | Recovery, deleveraging to drive long-term value |
| Kotak Institutional Eq. | Sell | ₹520 | Short-term gains likely, but long-term risks remain |
Disclaimer: This article is based on brokerage reports and is for informational purposes only. It does not constitute a recommendation or investment advice. Investors should consult their financial advisors before making investment decisions.
