UPL Limited — Q3 FY26 earnings call

Call held 2 Feb 2026

Management summary

UPL delivered a strong Q3 and 9M FY26 performance, marked by robust revenue and EBITDA growth, significant margin expansion, and substantial debt reduction. The company navigated macroeconomic headwinds and pricing pressures through effective execution and strategic initiatives, including new product launches and a disciplined approach to capital management. The filing of Advanta's DRHP signals a strategic move towards value unlocking and further deleveraging.

Highlights

  • Q3 FY26 Revenue of ₹12,269 crores, up 12% YoY, driven by 8% volume increase

  • Q3 FY26 Contribution Margin expanded 160 bps to 43%

  • Q3 FY26 EBITDA of ₹2,434 crores, up 13% YoY, achieving 20% margin

  • Q3 FY26 Profit Before Tax (PBT) jumped 90% YoY to ₹671 crores

  • Net debt reduced by over $400 million, leading to Net debt to EBITDA improvement from 3.8x to 2.5x

  • New product pipeline on track to exceed $130 million revenue target for the year

Concerns

  • Persistent pricing pressure in most molecules, limiting value recovery in the global crop protection market

  • Higher expected credit loss provisioning of ~$5 million in Q3 due due to liquidity stress on retailers/distributors in Latin America

  • Net working capital increased to 116 days (up 9 days YoY) as of Dec 31, 2025, due to higher sales and Q4 anticipation

  • US tariffs (50% on non-exempt products) continue to impact results, with a potential Q4 impact of over $30 million if tariffs persist

Key financials

  1. Revenue ₹12,269 Cr +12%YoY
  2. Contribution ₹5,227 Cr +17%YoY
  3. Contribution Margin 43%
  4. EBITDA ₹2,434 Cr +13%YoY
  5. EBITDA Margin 20%
  6. PBT ₹671 Cr +90%YoY
  7. Operating PATMI ₹452 Cr +45%YoY
  8. Net Debt ₹23,317 Cr
  9. Net Debt to EBITDA 2.5×
  10. Net Debt to Equity 0.6×

What they filed

Q1 FY27: revenue up 10.5%, net profit up 58.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue11,090 10,907 15,573 9,216 12,019 +8%12,269 +12%18,335 +18%10,181 +10%
EBITDA1,217 1,678 3,164 1,396 1,947 +60%2,236 +33%3,481 +10%1,367 −2%
Net profit-585 853 1,079 -176 612 +205%490 −43%1,294 +20%-73 +59%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • UPL Corp (Global Crop Protection)
    8% Revenue Growth14% Contribution Growth6% EBITDA Growth19% EBITDA Margin
  • UPL SAS (India Crop Protection)
    4% Revenue Growth800 bps Contribution Margin Improvement750 bps EBITDA Improvement
  • Advanta (Seeds & Post-Harvest)
    22% Revenue Growth14% Volume Expansion (Seeds)55% Contribution Margin22% EBITDA Increase
  • SUPERFORM (Manufacturing & Super Specialty)
    -11% Revenue Decline42% Emerging Super Specialty Growth470 bps Contribution Margin Improvement120 bps EBITDA Margin Improvement

Capital allocation

high confidence
  • Debt Net ₹23,317 Cr · 2.5× EBITDA
    • Repayment Debt prepayment in March 2025, contributing to reduced net finance costs $250 Mn
    • Rate reset Favorable SOFR-linked interest rate declined by 70 bps
    • Repayment Perpetual bond redemption in Q1 FY26, which contributed to net debt increase versus March 2025 $400 Mn
    On net debt, as at December 31, 2025, net debt stood at INR23,317 crores or $2.594 billion, reflecting a reduction of INR2,553 crores or $427 million.
  • M&A Advanta Divestment · Pending regulatory

    Deleveraging for UPL, value unlock for KKR, and strategic separation of fundamentally different crop protection and seeds businesses.

    Cash from the offer for sale will go to selling shareholders (UPL and KKR) for deleveraging the group balance sheet.

    I'm happy to share that the aforementioned DRHP was filed on the 19th of January earlier this year and is the first such step in this direction. Given that the process is pending requisite regulatory approvals, we are constrained from sharing any further details at this stage. For information pertaining to the IPO, please refer to the Draft Red Herring Prospectus filed with SEBI and available on the website.
  • Liquidity Cash $570 Mn · Undrawn $1.7 Bn Expected cash release of ~$700-800 million in Q4 FY26, combined with opening cash and unutilized credit lines, is sufficient to meet March and September 2026 debt maturities.
    On 29th of March, we have about $500 million. And if you look at our balance sheet for this quarter, we have an opening cash balance of about $570 million. As you also know that we have unutilized working capital lines of about $1.7 billion plus and Q4 being the strong quarter for us where a lot of cash release happens in Q4. So we are quite comfortable with the opening cash plus the unutilized lines that we have and the cash release that will happen during Q4. So we expect around $700 million to $800 million

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 4-8%
    I would again like to emphasize on the management's comfort and confidence in achieving our full year guidance of 4% to 8% growth in revenue and 12% to 16% EBITDA growth, given our resilient performance till date in FY '26.

    — Bikash Prasad

  • New Product Launches Revenue Revenue · this year (FY26) · High confidence >$130 million
    On the marketing excellence front, we continue to strengthen our new product pipeline and are on track to exceed our $130 million revenue target for new product launches this year.

    — Mike Frank

Profitability

  • EBITDA Growth Profitability · FY26 · High confidence 12-16%
    I would again like to emphasize on the management's comfort and confidence in achieving our full year guidance of 4% to 8% growth in revenue and 12% to 16% EBITDA growth, given our resilient performance till date in FY '26.

    — Bikash Prasad

Working Capital

  • Net Working Capital Days Working Capital · March 2026 · High confidence ~70 days
    We expect our March 2026 working capital days to be in line with the guidance given during the Capital Market Day of around 70 days.

    — Bikash Prasad

Debt

  • Net Debt to EBITDA Debt · year-end (FY26) · High confidence 1.6-1.8x

    Previously 2.1x → 1.6-1.8x

    But, as we had given or guided the market earlier, we expect our net debt-to-EBITDA to be between 1.6 to 1.8x, down from 2.1x at the beginning of the year.

    — Bikash Prasad

What to watch in Q4 FY26

Q4 FY26 Revenue Growth

Next quarter (Q4 FY26 results)
Current 9M FY26 revenue growth 8%
Target Implied Q4 growth to reach 4-8% for FY26

Why it matters

Verifies the company's ability to maintain momentum and meet full-year top-line targets despite Q4 being a strong base last year.

Now coming to your first question, just in terms of guidance, as we said, we're maintaining our guidance. Obviously, you can compute the numbers based on our results year-to-date.

Risks & concerns

  • US Tariffs

    high

    Ongoing 50% tariffs on non-exempt products imported into the US continue to impact results, with a potential Q4 impact of over $30 million if tariffs persist, despite mitigation strategies like price increases and shifting to technical-grade imports.

    Management acknowledged

  • Global Macroeconomic Headwinds

    medium

    Geopolitical uncertainties, shifting trade dynamics, continued tariff-driven volatility, pricing pressure, and softer commodity prices continue to pressure the crop protection value chain.

    Management acknowledged

  • China Overcapacity and Pricing Pressure

    medium

    Continued overcapacity in China contributes to low commodity prices for growers, impacting the market and leading to persistent pricing pressure in most molecules.

    Management acknowledged

  • LATAM Liquidity Stress and Expected Credit Losses (ECLs)

    medium

    Liquidity stress on retailers and distributors in Latin America resulted in higher expected credit loss provisioning, totaling approximately $5 million in Q3.

    Management acknowledged

Q&A highlights

6 direct
Q4 growth outlook compared to 9M performance and full-year guidance Direct
Now coming to your first question, just in terms of guidance, as we said, we're maintaining our guidance. Obviously, you can compute the numbers based on our results year-to-date. Again, the top line is just one component where obviously, we're focused on the bottom line. We're focused on cash generation. And so on every one of those metrics, including PBT, we're committed to driving very strong fourth quarter results.

Analyst questioned the implied slowdown in Q4 growth based on 9M performance and full-year guidance; management reiterated confidence in meeting targets by focusing on bottom line and cash, and confirmed Q4 growth across all regions.

Asked by Saurabh Jain

Impact of US tariffs and postponed sales on Q3 and Q4 performance Direct
Yes, Saurabh, so as I mentioned in my remarks, we did purposely postpone some sales in Q3 in December, in particular. We were, I would say, hopeful that we would see a lower tariff rate, which, of course, hasn't happened as of yet. And so some of the inventory that we were storing in bonded warehouses, we have now released and we're in the process of delivering to customers. I would say the quantum of that business that we postponed would be in the range of $30 million. And so I would say on top of what we would have expected to be a growth quarter in North America in Q4 regardless, there is a little bit more that we pushed from Q3 into Q4 that will also benefit the fourth quarter results.

Management clarified that ~$30 million in Q3 sales were deferred to Q4 due to tariff uncertainties, providing specific quantification of the impact and how it will shift revenue recognition.

Asked by Saurabh Jain

Pricing environment for post-patent and differentiated products Direct
Yes. So the pricing on our post-patent segment is largely stable. In fact, it's been stable for the last probably 6 to 9 months. And so we're not expecting much change in pricing in that segment. We are seeing some pricing headwinds on particular products that are in our differentiated portfolio. And the one that I mentioned in particular is one of our large products in Brazil called Sperto, which is one of our insecticides. And so we are seeing some disproportional impacts on some of those products.

Management provided a nuanced view of pricing, distinguishing between stable post-patent products and differentiated products facing headwinds, offering insight into margin pressures.

Asked by Tarang

Rationale and value creation for Advanta IPO Direct
Yes. This is Toshan. I think the Advanta IPO has, as Bikash said, three objectives. There is, a) deleveraging for UPL. There is b) value unlock for KKR. If you recollect KKR partnered with Advanta more than 3 years back when they put in a check of $300-plus million into Advanta. By the way, the cash that Advanta generates cash, I think there is also an elaborate strategy of Advanta, both for organic and inorganic value creation, which we have embarked already and we'll continue to do that. And lastly, third, we believe that the needs of crop protection in terms of the cash flows, capital allocation are very different from that of the seeds business.

Management clearly articulated the multi-faceted strategic rationale behind the Advanta IPO, including deleveraging, KKR exit, and recognizing the distinct business models of seeds and crop protection.

Asked by Tarang

Funding plan for upcoming debt maturities in March and September 2026 Direct
On 29th of March, we have about $500 million. And if you look at our balance sheet for this quarter, we have an opening cash balance of about $570 million. As you also know that we have unutilized working capital lines of about $1.7 billion plus and Q4 being the strong quarter for us where a lot of cash release happens in Q4. So we are quite comfortable with the opening cash plus the unutilized lines that we have and the cash release that will happen during Q4. So we expect around $700 million to $800 million

Management provided specific figures for cash on hand, unutilized credit lines, and expected Q4 cash generation, assuring investors of sufficient liquidity to cover significant upcoming debt maturities.

Asked by Imtiaz

Quantification of US tariff impact on EBITDA Direct
Yes. So on a year-to-date basis, we would estimate the impact that would accrue all the way to the EBITDA line would be approximately $8 million. Now the total tariffs we've paid is more than that, of course, but we've been able to offset some of the tariffs based on price increases that we've implemented, as well as, as I mentioned in my remarks, transitioning from importing formulated products to transitioning into tech products that we're now formulating in North America. ... In Q4 alone, if tariffs stay at 50%, it will likely be in the $30 plus million range of net tariffs that we may not be able to offset with some of these strategies that I mentioned.

Management quantified the YTD EBITDA impact of US tariffs at ~$8 million and provided a forward-looking estimate of >$30 million for Q4 alone if tariffs persist, giving investors a clearer picture of the financial headwind.

Asked by Siddharth Gadekar

2 min read 6 chapters

Detailed narrative

Robust Q3 & 9M FY26 Performance Amidst Headwinds

UPL delivered a strong Q3 FY26, with revenue growing 12% YoY to INR12,269 crores and EBITDA increasing 13% to INR2,434 crores, achieving a 20% margin. This performance was driven by an 8% volume increase and favorable exchange rates, despite persistent pricing pressure and macroeconomic uncertainties. For the nine months, revenue grew 8% and EBITDA surged 22% to INR5,941 crores, with a 200 bps margin improvement, showcasing resilience and effective execution.

Strategic Deleveraging and Improved Gearing Ratios

The company significantly reduced its net debt by over $400 million (or $800 million adjusting for perpetual bonds) to $2.594 billion as of December 31, 2025. This led to a substantial improvement in gearing ratios, with net debt to EBITDA falling from 3.8x to 2.5x and net debt to equity from 0.8x to 0.6x. Management expressed confidence in meeting upcoming debt maturities of ~$500 million in March and ~$400 million in September 2026, supported by a strong Q4 cash release of ~$700-800 million and ample liquidity.

Advanta IPO for Value Creation and Deleveraging

UPL filed the Draft Red Herring Prospectus (DRHP) for its seeds business, Advanta, on January 19, 2026. This move is an offer for sale, with proceeds flowing to selling shareholders (UPL and KKR) primarily for deleveraging UPL's balance sheet. The strategy aims to unlock value for shareholders, recognizing the distinct nature and growth trajectory of the seeds business compared to crop protection, similar to industry peers.

Platform-Specific Growth and Margin Expansion

UPL Corp, the global crop protection business, grew 8% in Q3, expanding its contribution margin by 200 bps and EBITDA by 6%. India Crop Protection (UPL SAS) saw 4% revenue growth, with contribution margin improving by over 800 bps and EBITDA by 750 bps, reflecting sharper business hygiene. Advanta delivered a robust 22% revenue growth and 22% EBITDA increase, fueled by a 14% volume expansion in seeds. SUPERFORM, despite an 11% revenue decline due to phasing shifts and lower input costs, improved its contribution margin by 470 bps.

Navigating US Tariffs and Market Dynamics

The company continues to face challenges from 50% US tariffs on certain imported products, which impacted Q3 EBITDA by an estimated ~$8 million YTD. To mitigate this, UPL is implementing price increases, shifting to importing technical-grade products for local formulation, and utilizing bonded warehouses. Management noted that ~$30 million in Q3 sales were purposely postponed to Q4, anticipating lower tariffs, which will now contribute to Q4 results.

Positive Outlook and FY26 Guidance Reaffirmed

UPL reaffirmed its full-year FY26 guidance of 4-8% revenue growth and 12-16% EBITDA growth, building on the strong momentum from the first three quarters. The company anticipates a strong, volume-led Q4, supported by in-season demand and new product launches, which are on track to exceed $130 million in revenue this year. The focus remains on disciplined execution, prudent financial management, and sustainable value creation.

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