UPL margin recovers sequentially but remains below last year
Revenue grew 17.74% year on year, but costs grew faster and the higher tax rate limited the conversion of a 37.40% rise in pre-tax profit into net profit.
Filed 17 Jul 2026, 10:13 IST · UPL Ltd (UPL)
Key takeaways
- Consolidated operating margin improved 0.53 percentage points sequentially to 19.41%, but was 1.08 percentage points below Q4FY25.
- Revenue grew 17.74% year on year, while expenses grew 19.34%, explaining the margin decline despite 11.50% operating-profit growth.
- Net profit rose 19.93% year on year to Rs 12.57 EPS, even as the tax rate increased 9.97 percentage points to 31.61%.
Price around the results
Q4 revenue recovery lifted operating profit
UPL reported consolidated revenue growth of 17.74% year on year and 49.44% sequentially, with operating profit rising 11.50% and 53.56%, respectively. The sequential improvement was broad enough for operating margin to rise 0.53 percentage points, while the year-on-year comparison remained weaker because expenses grew faster than revenue. Pre-tax profit increased 37.40% year on year, but net profit growth was lower as the tax rate rose to 31.61%.
Costs widened the year-on-year margin gap
Year on year, expenses grew 19.34% against revenue growth of 17.74%, narrowing operating margin by 1.08 percentage points. Sequentially, revenue growth of 49.44% exceeded expense growth of 48.48%, supporting the 0.53-percentage-point margin recovery. Depreciation rose 29.79% year on year and interest fell 8.53%; other income contributed 4.49% of pre-tax profit, so it was not the main source of reported profit.
Margin has risen for three straight quarters
Operating margin improved from 15.15% in Q1FY26 to 16.65% in Q2FY26, 18.88% in Q3FY26 and 19.41% in Q4FY26. That marks a third consecutive sequential increase, although the latest margin was still below Q4FY25's 20.49%. UPL's margin was 0.64 percentage points above the 18.77% median for the 51 Commodities peers that had reported the quarter.
Management pointed to product expansion and delivery against targets
Management said FY26 revenue growth of 11%, EBITDA growth of 18% and net debt to EBITDA below 1.6x all met its guidance. The presentation said new-product launch revenue exceeded $160 million in FY26 and that UPL outpaced the market in volume growth while gaining market share. Management also described expansion in OpenAg biological products, Advanta's crop and geographic portfolio, and capacity for key active ingredients, while noting that supply availability constrained field corn.
Initial stock rise reversed over the following month
The stock rose 3.56% initially, outperforming its benchmark by 5.05%, with volume at 4.29 times the usual level. The initial move was larger than the 2.45% median absolute move after the company's previous eight results, when the stock rose three times and fell five times. The reaction then reversed: the stock was down 3.07% after one session and 7.62% after 30 sessions.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹18,335 cr | ₹12,269 cr | +49.44% | +17.74% |
| Other income | ₹85 cr | ₹-45 cr | — | — |
| Expenses | ₹14,777 cr | ₹9,952 cr | +48.48% | +19.34% |
| Operating profit | ₹3,558 cr | ₹2,317 cr | +53.56% | +11.50% |
| Operating margin (%) | 19.41% | 18.88% | — | — |
| Interest | ₹836 cr | ₹774 cr | +8.01% | -8.53% |
| Depreciation | ₹915 cr | ₹827 cr | +10.64% | +29.79% |
| Profit before tax | ₹1,892 cr | ₹671 cr | +181.97% | +37.40% |
| Tax | ₹598 cr | ₹181 cr | +230.39% | +100.67% |
| Net profit | ₹1,294 cr | ₹490 cr | +164.08% | +19.93% |
| EPS (₹) | ₹12.57 | ₹4.69 | +168.02% | +10.07% |
Operating margin of 19.41% compares with a Commodities sector median of 18.77% across 51 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +3.56% | +5.05% |
| Next session | -3.07% | — |
| 5 sessions | -1.26% | +0.91% |
| 15 sessions | -0.67% | — |
| 30 sessions | -7.62% | — |
Volume on the results session was 4.29× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- FY26 revenue growth was 11%, EBITDA growth was 18%, and net debt to EBITDA was below 1.6x, with all metrics achieved.
- New Product Launch revenues exceeded $160 million in FY26.
Expansion
- UPL is expanding its biocontrol, microbial, pheromone, peptide and metabolite offerings through OpenAg innovation.
- Advanta continued geographic expansion in India and LAN while growing market share.
- Advanta is expanding its portfolio in vegetables and fresh corn across additional crops.
- UPL expanded operating capacity for key active ingredients.
Competition
- UPL said it outpaced the market in volume growth and gained market share.
Problems & risks
- The company described FY26 as a challenging environment.
- Advanta said supply availability constrained its field corn business.
What to watch
- Whether operating margin holds above 19.41% after its third straight sequential improvement.
- Whether expenses continue to grow slower than revenue, following the Q4 sequential gap of 48.48% versus 49.44%.
- Whether the tax rate moderates from 31.61% after rising 9.97 percentage points year on year.