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The shares of this agrochemical stock engaged in the business of industrial chemicals, agrochemicals, specialty chemicals, chemical intermediates, and production was up 2 percent in intraday trade after signing a strategic partnership with CH4 Global to reduce methane-reducing feed supplement.
Share Price Movement
The share price of UPL Ltd on Monday was up by 2 percent in intraday trade and touched a day’s high of Rs.578.10 per share. The stock has delivered a return of around 1.44 percent thus underperforming the index. However, the shares have adjusted from the day’s high and were trading at 571.90 percent higher than the previous closing price of Rs. 566.10 per share.
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What Happened
UPL has signed a strategic partnership with CH4 Global to distribute the methane-reducing feed supplement named Methane Tamer. It is used for millions of cattle daily. This multi-phase agreement is targeting key livestock markets in India, Brazil, Uruguay, Argentina, and Paraguay, which collectively account for over 40 percent of the global cattle population.
This initiative aims to lower greenhouse gas emissions in the livestock sector through eco-friendly feed solutions. Methane Tamer which is derived from Asparagopsis seaweed, can reduce enteric methane emissions by up to 90 percent. UPL would integrate this supplement into its existing feed formulations and leverage its market presence and distribution networks.
Management Commentary
On the strategic partnership, Jai Shroff, the Chairman and Group CEO of UPL said, “Our OpenAg purpose places collaboration at the heart of progress, and through this partnership, we aim to mark an important step in showing how agriculture can deliver on overall efforts to reduce greenhouse gasses. Methane is almost thirty times as harmful to global warming than CO2 and recent reports show the highest levels in 800,000 years, so its reduction must be our top priority. This initiative will present a new model for sustainable livestock which can be scaled globally, helping the industry reach net-zero for greenhouse gasses by adopting methane mitigation technologies, and demonstrating agriculture’s positive impact on the environment.”
Steve Meller, the President and the CEO of CH4 Global, said, “We are thrilled to join forces with a market leader like UPL to accelerate the global adoption of Methane Tamer. UPL’s vast footprint across the key markets and its trusted relationships with farmers make them an ideal partner as we scale up to meet the massive need for enteric methane reduction solutions.”
Financials
According to its recent filing, In Q2FY25, UPL Ltd reported a 9 percent increase in revenue to Rs.11,090 crore in Q2FY25, compared to Rs.10,170 crore in Q2FY24. Furthermore, quarterly, the company saw an increase of 22.31 percent in revenue from Rs.9,067 crore in Q1FY25.
In the same period, the company reported an increase in net losses to Rs.585 crore in Q2FY25, as losses widened from Rs.293 crore in Q2FY24 and stayed consistent from a loss of Rs.527 crore in Q1FY25.
The company has a current ratio of 1.35, a debt-to-equity ratio of 1.23, and a price-to-sales of 0.90 currently.
Revenue Mix
The company earns 84.65 percent from Crop protection, 9.97 percent from the Seeds business, and 5.36 percent from Non-agro as of Q2FY25. Most of the profits are derived from crop protection.
Shareholding Pattern
As of September 2024, the shareholding pattern includes promoters holding a share of 32.51 percent stake in UPL, Foreign Institutional Investors (FII) holding around 34.22 percent, Domestic Institutional investors (DII) standing at 17.64 percent, and public holdings standing at 15.59 percent.
About the company
UPL Limited, formerly known as United Phosphorus (NS:UPLL) Limited is into agrochemicals, specialty chemicals, and industrial chemicals. The company was founded in 1969 and is headquartered in Mumbai. They operate in over 130 countries, providing a diverse range of products including seeds, pesticides, and plant growth regulators.
Their business model focuses on leveraging a robust R&D framework and strategic acquisitions, such as Arysta LifeScience. They aim to empower farmers with effective solutions while ensuring food security and environmental sustainability.
Written by – Santhosh S
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