UPL Ltd

Target at a glance

• Target: Misr Hytech Seed International S.A.E., Egypt-based agricultural seeds company.
• Hytech USA LLC controls Hytech Egypt; Advanta BV will acquire Hytech Egypt.
• Turnover (FY2023–FY2025): USD 34.9m, 37.6m, 25.7m.
• Incorporation date not disclosed.
• Industry: Agricultural seeds; products include corn seeds.

Deal terms

• Cash consideration approx US$110 million.
• Advanta BV will hold 99.98% on completion.
• Completion target on or before 31 January 2027.
• Regulatory approvals required: COMESA and Egyptian Competition Authority.

Related party and governance

• Not a related party transaction.
• Promoter group has no direct interest in target.
• UPL holds 78.21% in Advanta Enterprises; Advanta BV is a step-down subsidiary.

Strategic rationale & background

• Strategic platform to lead seed markets in Middle East and Africa.
• Target operates in seeds, focusing on corn seed products in Egypt.

Rating Action

• S&P revised UPL Corp's outlook from Stable to Positive; BB issuer rating affirmed.

Instruments Rated

• BB long-term issuer credit rating affirmed.
• BB senior unsecured notes rating affirmed.

Rating Agency

• S&P Global Ratings (S&P).

Rationale

• Volume recovery supports earnings over the next 12 months.
• FFO-to-debt reached 23% in FY2026.
• Forecast FFO-to-debt 22–25% through FY2028.
• Upcoming maturities: US$500m SLT debt due Dec 2026; US$500m due Sep 2027.
• Liquidity is less than adequate; undrawn lines exceed US$1.5B.
• LATAM crop protection volumes expected to recover.

Outlook & Changes

• Outlook: Positive; rating remains BB.
• Material change: Outlook upgraded from Stable to Positive.

Rating Sensitivities

• Upgrade possible with sustained earnings and improving liquidity.
• Downgrade risk if demand weakens or debt rises materially.

Financial Highlights

• FFO-to-debt 23% in FY2026; projected 22–25% through FY2028.

Meeting Details

• Aug 14, 2026: One-on-One & Group, Physical, Equirus Annual India Conference, Mumbai.
• Aug 18, 2026: Motilal Oswal 22nd Annual Global Investor Conference; audience Analysts.

Target overview

• Target: Sustainable Tech Inc, USA, Agro Chemical sector.
• Line of business: aquatics water treatment.
• Date of incorporation: July 14, 2026.
• Turnover: not disclosed.

Deal structure and consideration

• Acquisition price: cash US$1.
• Form: cash purchase of 100% shares.
• Ownership gained: 100% stake via UPL NA Inc.
• UPL effectively holds 77.78% of UPL NA Inc via Cayman.
• Related party: not a related party transaction; no promoter interest.
• Regulatory approvals: none required.
• Completion: completed on July 27, 2026.

Rationale and background

• Purpose: expand aquatics business outside main crop protection.
• Strategic rationale: enter water treatment and environmental solutions.
• Presence: USA.
• Background: aquatics water treatment and environmental solutions.

Meeting Details

• Board meeting scheduled for Aug 3, 2026; time and venue not disclosed.

Key Agenda Items

• Consider and approve unaudited consolidated and standalone results for quarter ended June 30, 2026, with Limited Review Reports.
• Earnings call schedule for Q1 FY27 results at 16:30 IST on Aug 3, 2026.

Other Notes

• Trading window closed for Designated Persons from June 30, 2026 until 48 hours after results dissemination.
• Presentation of results to be posted on the company website.

Processing and listing

• Securities received for dematerialisation in Q2 2026 were confirmed to depositories.
• Dematerialised securities listed on the exchanges where existing securities are listed.
• Physical certificates for dematerialisation were mutilated and cancelled; depository name substituted within prescribed timelines.

Overview

• Standalone BRSR for FY2025-26; reporting period 01-04-2025 to 31-03-2026.
• Main activities: manufacturing chemicals (83.2% turnover) and wholesale trading (16.8%).
• Exports account for 65.15% of turnover; operates 3 plants and 71 offices nationwide.
• Independent reasonable assurance on BRSR Core provided by TÜV SÜD South Asia.
• CSR applicability under Companies Act; CSR turnover Rs 5,747.96 crore.
• Aspirational district project in Narmada, Gujarat, with Rs 80.92 lakh CSR spend.
• Reporting boundary is standalone.

Key ESG Risks & Opportunities

• Climate change risk; decarbonisation roadmap to reduce GHG emissions.
• Energy management risk; shift toward renewables via decarbonisation plan.
• Waste management risk; 4R strategy and 60% disposal reduction by 2030.
• Water use risk; robust strategy to minimize water footprint.
• Compliance risk; regular regulatory reviews and strong governance.
• Counterfeit products risk; supply chain controls and anti-counterfeit measures.
• Occupational health and safety risk; ISO 45001 across sites with ongoing improvements.
• Opportunity: process innovation reduces energy, water, and waste.
• Opportunity: sustainable supply chain and agricultural productivity enhancements.

Governance & Policy Highlights

• Sustainability Committee of Directors oversees BR policies.
• Highest BR responsibility rests with a designated Whole-Time Director.
• Board-approved policies cover ethics, product responsibility, HR, environment, and stakeholders.
• Policies extended to value chain; supplier code of conduct; CSR and OHS policies.
• Independent assurance provided by TÜV SÜD for Core metrics.
• BR reviews conducted annually by Sustainability Committee; statutory compliance reviewed annually.
• Policies aligned with GRI, UNGC, and ISO frameworks.

Social Responsibility & Workforce

• Total workforce 596 employees and 286 workers; board has 3 women out of 9.
• Gender representation on board is 33% women.
• 100% of employees are covered by health and accident insurance.
• LTIFR: employees 0.00; workers 0.18; no fatalities.
• Well-being spend 4% of revenue; 100% health training coverage for staff.
• Retirement benefits: full PF and gratuity coverage; ESIC for workers.
• Grievance mechanism via dedicated platforms; policies linked to human rights and safety.

Environmental Performance

• Total energy 178,781 GJ; renewables 28,021 GJ; non-renewables 150,760 GJ.
• Renewable energy share approx. 15-16% of total energy.
• Scope 1 emissions 4,589 MT; Scope 2 emissions 12,701 MT.
• Scope 1+2 intensity: 0.0000002 per rupee turnover; PPP-adjusted 0.0000045.
• Scope 3 emissions 302,419 tCO2; PPP intensity 0.0000053.
• Water withdrawal 50,571 KL; Zero Liquid Discharge at 100% sites.
• Water discharge total 1,381,692 KL; includes seawater and CETP releases.
• Total waste generated 6,664 MT; hazardous waste 5,075 MT; 4R waste strategy.
• Plastic packaging recycled 1,346 MT; 100% packaging offset in India; EPR plan CPCB-approved.
• LCA studies conducted: none; 60% waste disposal reduction target by 2030.

Stakeholder Engagement & Complaints

• Stakeholders engaged include top management, employees, regulators, suppliers, customers, academia, communities.
• Engagement channels include board meetings, AGM, townhalls, emails, and community meetings.
• Community engagement via UPL Comms Engage with quarterly meetings.
• Investors: 61 complaints filed; 60 resolved; 1 pending; SEBI action completed.
• Communities: 55 complaints resolved; 1 unresolved from preceding FY.
• Employees: 0 complaints filed; Customers: complaints tracked with some pending at courts.
• Value chain partners: 68% assessments for health, safety, and wages.

Other Notable Metrics

• Sustainable sourcing: 43% inputs from sustainable sources; target at least 70% by 2030.
• Direct purchases from MSMEs or women-led groups: 18.65% of total inputs.
• Cybersecurity: Global Business Information Protection Policy; 0 data breaches.
• Product recalls: none; product labeling exceeds regulatory requirements.
• Affiliations: six trade/industry bodies; active in policy and sustainability dialogues.
• POSH: 0 complaints in FY2025-26; 2 in FY2024-25.

Financial performance

• Revenue up 11% to ₹51,839 crore.
• EBITDA ₹9,588 crore, up 18%.
• EBITDA margin 18.5%.
• PATMI ₹2,220 crore; operating PATMI ₹1,860 crore.
• Consolidated CFO ₹7,855 crore; Capex around $261m funded from internal cash.

Capital structure & liquidity

• Net debt/EBITDA ~1.6x.
• Refinanced short-term liabilities to 2029 tenors.
• Redemption of $400m perpetual bonds via internal cash.
• $300m committed revolving credit facility secured.

Dividends & capital changes

• Final dividend ₹6 per share declared; record date 17-Jul-2026.