UPL has unveiled a plan to merge its global crop protection operations, UPL SAS and UPL Corp, into a new, independently listed entity named UPL Global. The parent company, UPL Limited, will continue to oversee the formulation business, R&D, SUPERFORM and Advanta, acting as a holding company.
The restructuring is intended to create a unified crop protection platform, unlocking potential synergies while remaining cash and tax neutral. Minority interests are safeguarded, and the company’s capital structure will remain unchanged, with no significant impact on existing leverage.
In its report, Nuvama Institutional Equities highlighted that while the demerger could generate value by giving individual businesses standard industry valuations, leverage concerns remain. “Given the recent stock rally, unresolved debt issues and potential post-restructuring dilution, we downgrade UPL to ‘Hold’ with a revised target price of Rs 816 per share,” the report stated. The firm also applied a sum-of-the-parts valuation based on EV/EBITDA multiples, noting that the stock currently trades at 9.5x/7.7x FY26E/27E EV/EBITDA.
Details of the restructuring
Approved on February 20, the composite scheme consolidates UPL’s India crop protection business (90.91% owned UPL SAS) and international operations (77.78% owned via UPL Crop Protection Holdings) under UPL Global, which will be led by CEO Mike Frank. Post-reorganisation, UPL Global will house the global crop protection business, while UPL Limited will focus on formulations, R&D and investments, with projected revenue of ~Rs 50 billion and EBITDA margins of 7–8%. Existing shareholders will hold stakes in both UPL Global and UPL Limited.
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Debt structure remains a concern
While the restructuring is expected to deliver operational and administrative synergies, the overall debt level remains largely unchanged. UPL Global is projected to carry net debt of ~Rs 190 billion, while the standalone business will hold ~Rs 32 billion. Analysts note that further deleveraging will depend on cash flow generation and working capital management, making this aspect largely event neutral.
Technical overview: Based on Trendlyne data, the daily RSI (14) for UPL stands at 53.0, where an RSI below 30 indicates an oversold condition and above 70 signals overbought.
Moving averages: UPL is currently trading below all 8 of its simple moving averages, reflecting a bearish trend.
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