UPL margin rebounds, but lower other income cuts profit 26.14% YoY
Revenue rose 16.49% QoQ and costs grew more slowly, while other income fell 84.32% YoY and the tax rate increased 4.56 percentage points.
Filed 02 Nov 2026, 14:48 IST · UPL Ltd (UPL)
Key takeaways
- Consolidated operating margin recovered 4.31 percentage points QoQ to 18.55% as revenue grew faster than expenses.
- Net profit fell 26.14% YoY to Rs 452 cr because sharply lower other income and higher interest and depreciation outweighed the operating-profit gain.
- UPL's 18.55% operating margin was 3.32 percentage points above the 15.23% median for 61 reported Commodities peers.
Price around the results
QoQ recovery was led by operating leverage
Consolidated revenue rose 16.49% QoQ, while expenses increased 10.64%, lifting operating margin by 4.31 percentage points to 18.55%. That reversed much of the Q1FY27 weakness, when operating margin was 14.24% and the company reported a net loss of Rs 73 cr. Management said Q2 EBITDA was affected by regional and product mix, while increased raw-material costs offset part of the margin expansion.
Profit quality weakened despite better operating profit
Operating profit increased 9.95% YoY even as revenue declined 1.32%, because expenses fell 3.57%; however, interest rose 4.46% and depreciation increased 6.23%. Other income dropped 84.32% YoY to Rs 53 cr and accounted for 8.62% of pre-tax profit, compared with Rs 338 cr a year earlier. The tax rate also rose 4.56 percentage points YoY to 26.50%, leaving net profit down 26.14%.
Margin is above peers but below the recent peak
UPL's 18.55% operating margin was 3.32 percentage points above the 15.23% median for 61 Commodities peers that had reported the quarter. The margin has improved from 14.24% in Q1FY27, but remains below 19.41% in Q4FY26 and 18.88% in Q3FY26. Management said H1 EBITDA was affected by lower volumes, which remains relevant alongside the quarter's mix and raw-material cost pressures.
Management flags capacity projects and weather as key variables
Management said UPL plans to expand cyanation capacity threefold. It also said the phosphorus value-chain project has peak revenue potential of over Rs 500 cr, while the cyanide and bio-ethanol projects under construction have peak revenue potential of over Rs 600 cr and Rs 1,200 cr, respectively. Management said its FY27 guidance assumes no further adverse weather conditions, including El Niño.
No recorded market reaction yet
There is no recorded post-result stock move yet. After the previous eight results, UPL's stock rose four times and fell four times, with a median absolute move of 3.56%, so the historical response has been mixed rather than consistently directional.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹11,860 cr | ₹10,181 cr | +16.49% | -1.32% |
| Other income | ₹53 cr | ₹125 cr | -57.60% | -84.32% |
| Expenses | ₹9,660 cr | ₹8,731 cr | +10.64% | -3.57% |
| Operating profit | ₹2,200 cr | ₹1,450 cr | +51.72% | +9.95% |
| Operating margin (%) | 18.55% | 14.24% | — | — |
| Interest | ₹819 cr | ₹852 cr | -3.87% | +4.46% |
| Depreciation | ₹819 cr | ₹832 cr | -1.56% | +6.23% |
| Profit before tax | ₹615 cr | ₹-109 cr | — | -21.56% |
| Tax | ₹163 cr | ₹-36 cr | — | -5.23% |
| Net profit | ₹452 cr | ₹-73 cr | — | -26.14% |
| EPS (₹) | ₹4.99 | ₹0.12 | +4058.33% | -26.07% |
Operating margin of 18.55% compares with a Commodities sector median of 15.23% across 61 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- FY27 guidance assumes no further adverse weather conditions, including El Niño.
Expansion
- UPL plans to expand cyanation capacity threefold.
- UPL's phosphorus value-chain project has peak revenue potential of over ₹500 crore.
- UPL's cyanide value-chain project is under construction and has peak revenue potential of over ₹600 crore.
- UPL's bio-ethanol project is under construction and has peak revenue potential of over ₹1,200 crore.
Problems & risks
- Q2 EBITDA was impacted by regional and product mix.
- Q2 margin expansion was offset by increased raw-material costs.
- H1 EBITDA was impacted by lower volumes.
What to watch
- Whether operating margin holds above 18.55% after the Q2 mix and raw-material cost pressures.
- Whether revenue growth improves from the -1.32% YoY contraction while volumes remain a focus after management's H1 commentary.
- Whether other income remains near Rs 53 cr and the tax rate stays near 26.50%.