Weak Q1 margin show, lack of triggers to limit upsides in UPL

While debt levels increased in Q1, the company maintained its FY22 guidance

India’s largest agrichemical stock UPL shed over 2 per cent in trade due to a weak operating performance in the June (Q1FY22) quarter. A slight increase in debt, concerns over weather-related disruption in key markets and lack of near term triggers could cap upsides in the near term. Most brokerages have a buy rating on the stock which has gained 70 per cent since January this year.

The June quarter miss on the revenue and operating profit margin fronts are near term dampeners for the stock. Sales growth of 9 per cent led by volume and pricing gains was a