Shares of UPL hit a 52-week low of Rs 618.05, down 5 percent on the BSE in Wednesday’s intra-day trade, falling 23 percent in a month, after the closure of the buyback offer on May 20, 2022. The stock of pesticides and agrochemicals company fell below its previous low of Rs 625 that it had touched on February 24, 2022.
UPL bought back 13.43 million equity shares at an average price of Rs 813.92 a piece. The company has utilized Rs 1,094 crore, which represents 99.43 percent of the maximum buyback size.
On April 7, 2022, the company commenced buyback from shareholders and beneficial owners of the company (other than the promoters, promoter group, and persons in control of the company) via the open market route. Meanwhile, on June 9, UPL informed that the company’s investment-grade credit rating has been maintained at Baa3 by Moody’s with a ‘stable outlook.’
UPL expects strong performance (10 percent-plus revenue growth and 12-15 percent EBITDA growth) in the current fiscal year FY23, supported by superior growth of high-margin differentiated and sustainable solutions, accelerated penetration in select markets, and efficient cost and supply chain management.
The company will continue to focus on optimizing working capital and investments leading to an increase in ROCE and improving leverage ratios. The company is also committed to maintaining its investment-grade credit rating.
Analysts at Emkay Global Financial Services believe UPL’s strategy to expand their D&S solutions offerings and focus on increasing penetration in high-growth crops segments will drive sustainable growth and margin expansion. “However, considering higher-than-expected net debt levels and interest thereon, we have cut EPS estimates by 2.6 percent/0.8 percent for FY23/FY24,” the brokerage firm added.
