Why Did UPL Shares Jump 6% Despite 43% YoY Fall in Net Profit?

Synopsis: Despite a 43% YoY fall in net profit to Rs 490 crore, UPL Limited shares jumped 6% as investors focused on 12% YoY revenue growth to Rs 12,269 crore and a sharp improvement in core profitability. The YoY profit comparison was distorted by last year’s one-off exceptional gains and a large tax credit, rather than weak operating performance.

The shares of this company, which is primarily engaged in the business of agrochemicals, industrial chemicals, chemical intermediates, speciality chemicals and the production and sale of field crops and vegetable seeds, had its shares in momentum despite a huge profit fall on a YoY basis.

With the market cap of Rs 57,502 crore, the shares of UPL Ltd have gained about 6% and reached a high at Rs 706.90, compared to their previous day’s closing price of Rs 665.35. The shares are trading at a PE of 24.8, whereas its industry PE is at 27.7

Q3 Result

UPL Ltd had a strong and steady quarter on the revenue front. Revenue from operations came in at Rs 12,269 crore in Q3 FY26, up 12% YoY compared to Rs 10,907 crore YoY and 2% QoQ compared to Rs 12,019 crore, respectively. However, the profits tell a different story. Net profit fell to Rs 490 crore, a sharp 43% YoY fall from Rs 853 crore and a 20% QoQ fall from Rs 612 crore.

FY24 exceptional gains and tax credits distort YoY comparison

The fact is that revenue and operating profitability are definitely on the mend. Revenue from operations stood at Rs 12,269 crore in Dec-25 compared with Rs 10,907 crore in Dec-24, while profit before exceptional items and tax grew to Rs 727 crore from Rs 430 crore, which is a remarkable core business performance.

However, FY24 has resulted in a flawed base due to one-time factors. In Dec-24, the company reported exceptional gains of Rs 76 crore, whereas in Dec-25, it reported only Rs 56 crore. More significantly, a tax credit of Rs 499 crore in Dec-24 artificially pushed up the bottom-line performance, as compared to a tax expense of Rs 181 crore in Dec-25.

This is reflected in the deferred tax account, where a deferred tax credit of Rs 75 crore in Dec-24 contrasts sharply with a meagre credit of only Rs 6 crore in Dec-25. Consequently, PAT declined to Rs 490 crore from Rs 853 crore, despite the increase in revenue and PBT. Therefore, any comparison with FY24 is strictly mathematically incorrect owing to exceptional items and balance-sheet-driven tax charges, and not because of any weakness in operating performance.

Management commentary

Management Remarks on Q3 Performance: Jai Shroff, Chairman & Group CEO, UPL Limited, said, “We are proud to deliver yet another record quarter, building on the solid foundation of last year’s strong base. This achievement reflects the strength of UPL’s diversified business model, driven by our robust intellectual property portfolio, cutting-edge digital and analytics capabilities, and unwavering commitment to innovation and sustainability. 

Our platforms are on pathways of unlocking significant value. As we continue to transform and scale our business, we remain focused on delivering long-term sustainable growth and creating value for all our stakeholders.”

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