Worst is over; specialty chemicals, new products to drive growth: UPL

Mint

12-05-2025

Mumbai: Leading maker of agricultural chemicals and seeds UPL Limited is betting on new product launches and further diversification from the agricultural sector to sustain the recovery it recorded in FY25 further in the current fiscal.
The company's revenue had grown 8% in FY25 after declining 20% in FY24. It also clocked a ₹ 1,383 crore loss in FY24 due to adverse market conditions, its first annual loss in nearly two decades.
Currently, the company also stands to gain from the US-imposed tariff escalation, which would make it a preferable supplier over Chinese companies to American companies, said Jai Shroff, chairman and group CEO, UPL Ltd.
'In the US, there is a fantastic opportunity for us. We are competing without tariffs anyway. With tariffs, we are getting more phone calls from the US customers,' Shroff told the media during a post-earnings conference on Monday. North America accounted for 13% of UPL's FY25 revenue, a shade higher than it earned in India. Latin America is its largest market, accounting for 38% of revenues.
To be sure, over the weekend, the Trump administration struck a deal with China to reduce tariffs on Chinese imports from 145% to 30% for 90 days during which the two nations will try to thrash out a trade deal. In return, China has also reduced tariffs on US imports to 10%.
Meanwhile, the US has levied a 26% tariff on all Indian shipments.
UPL on Monday said it has changed the name of its fully owned subsidiary UPL Specialty Chemicals Ltd to Superform Chemistries Ltd to signal its diversification into specialty chemicals beyond the agriculture industry. It will operate as a fully independent entity, Shroff said. The company logged revenues of ₹ 1 billion in FY25 and UPL expects the business to grow more than 20% in FY26.
To bring down its cost of production, UPL had invested in backward integration and started producing a lot of primary chemicals, Shroff said. The company realized that these base chemicals could now be used to manufacture specialty chemicals for sectors beyond agriculture such as pharmaceuticals, paint, polymers and perfumes, he said.
'There is a big need in India (for specialty chemicals) and we have a lot of inquiries. When we looked at the opportunity of Superform (we realized) that we were restricting the growth of Superform. So, we are creating a dedicated, focussed team who runs that business,' Shroff said.
The business will be headed by Raj Tiwari as its chief executive officer. UPL will invest ₹ 400-500 crore every year in Superform.
On its part, UPL plans to launch 25 new products in FY26, which have a cumulative revenue potential of $130 million (about ₹ 1,100 crore), according to Mike Frank, the chief executive of UPL Corporation. New products brought in $92 million ( ₹ 780 crore) out of the company's total revenue of ₹ 46,640 crore in FY25.
The worst is over for UPL now, Shroff said. 'UPL took a very aggressive write down in the previous year. We cleaned up our high-cost inventory. Our teams across the world also got a clear direction that we need to get back to growth after a very tough period,' he said.
The company reported a profit of ₹ 897 crore for FY25, ₹ 896 crore of which was accrued in the fourth fiscal quarter. Q4 revenue was up 11% year-on-year to ₹ 15,570 crore.
Q4 earnings before interest, tax, depreciation and amortization (Ebitda) grew 68% year-on-year to ₹ 3,240 crore. Ebitda margin improved 710 basis points to 20.8%.
The company deleveraged its balance sheet by $1 billion in FY25 to end the year with a net debt of $1.62 billion ( ₹ 13,860 crore). Its net debt-to-Ebitda ratio improved to 1.7 from 4 at the end of FY24.
Generally an acquisitive company, UPL will continue to focus on deleveraging barring any bargain deal that comes its way, Shroff said.
The UPL stock gained nearly 35% since the beginning of the year compared to 5% for the benchmark Sensex. On Monday, the stock closed flat at ₹ 675.9 on the BSE. It is still trading below its 52-week high of ₹ 698.85.