UPL shares jumped over 5 per cent after global brokerage Investec upgraded its rating on the stock to ‘buy’ from an earlier ‘sell’ call, and hit a 52-week high of Rs 636.80 on February 3.
Apart from the rating upgrade, Investec also raised its price target for the stock to Rs 700, significantly higher than the previous target of Rs 450.
Investec’s optimism towards UPL is driven by expectations that the company will successfully reduce its overall debt levels in FY25. UPL’s net debt stood at Rs 27,531 crore as of September 2024.
The brokerage is also confident that UPL will meet its guidance on the back of improving global macro demand and strong focus on operational efficiency.
At 09.31 am, UPL shares were trading at Rs 632.60 on the NSE.
Meanwhile, the sentiment for the stock also improved following the announcements of several measures to support the agriculture sector in Budget 2025, which will benefit UPL.
In the Union Budget 2025, Finance Minister Nirmala Sitharaman introduced several measures to promote crop diversification, improve irrigation facilities and enhance credit access for farmers. She also launched a mission to achieve self-sufficiency in pulses in the next six years, with a focus on tur, urad and lentil.
“The government will implement the Dhan Dhan Yojana in partnership with the states to increase productivity, diversify crops, enhance post-harvest storage, improve irrigation and provide both short-term and long-term credit to support 1.7 crore farmers,” Sitharaman announced.
Improving rural consumption and farmers’ incomes will directly benefit UPL as this segment forms the company’s major consumer base.
With today’s session’s gains, UPL shares have extended its winning streak to the fifth consecutive session, gaining over 17 per cent during this period.