UPL has had a difficult run this year, with the stock correcting sharply from its earlier levels. The share price of the company plunged 28% so far in 2026. 

The global brokerage house Jefferies believes the correction may have created an opportunity. The brokerage has retained its ‘Buy’ rating and set a target price of Rs 715. This implies around 26% upside potential.

The brokerage’s latest management meeting points to three areas that could change the earnings trajectory. This includes stronger growth at Advanta, better margins as UPL exits unprofitable businesses, and tighter inventory management in Latin America.

Let’s take a look at the key reason why the brokerage house is bullish on this stock and the rationale behind this –

Jefferies on UPL: Advanta could become a bigger earnings driver

One of the key areas highlighted by Jefferies is Advanta, UPL’s seeds business.

The company had held back investments in the business while focusing on reducing debt during financial years 2025 and 2026. That is now changing.

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Management expects Advanta to deliver strong double-digit revenue and Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) growth in FY27.

Jefferies said, “Advanta should deliver strong double-digit revenue/Ebitda growth.”

The company is increasing investments in new markets and distribution. Its recent acquisition of Egypt-based Misr Hytech Seeds for US$110 million could also help expand its presence in Africa.

The acquisition comes with an estimated internal rate of return (IRR) of around 30%, according to management.

Can UPL improve margins?

As per the brokerage house report, the company is reducing its exposure to products, geographies and joint ventures that do not generate adequate returns. It recently announced the closure of its Bioplanta joint venture in Brazil.

Jefferies expects a 50-basis-point improvement in EBITDA margin in FY27 and projects 14% year-on-year EBITDA growth.

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Jefferies on UPL: El Nino remains a key risk

Growing El Nino concerns in Brazil and Latin America could affect agricultural demand and inventory levels. UPL is therefore taking a more cautious approach to stocking products in the region.

Jefferies noted, “Tight control on inventory in Latam.”

Instead of pushing products to farmers ahead of the crop season, the company is limiting advance sales. 

At the same time, management expects second-quarter growth to remain broadly in line with its full-year guidance of 10-14%.

Advanta IPO could unlock value

There is another potential catalyst. UPL has received approval from the Securities and Exchange Board of India (SEBI) for the initial public offering (IPO) of Advanta.

Management plans to begin marketing the IPO soon.

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Jefferies sees room for recovery

UPL shares have corrected around 28% so far in 2026. The brokerage believes this decline has already lowered market expectations.

It projects 14% EBITDA growth in FY27 and values UPL at 14 times June 2028 forward price-to-earnings (P/E), broadly in line with its long-term average.

The brokerage said, “Undemanding valuations, maintain Buy.”

It also cautioned that a stronger-than-expected El Nino remains a key risk.

Disclaimer: This article is based on research reports from one or more brokerage firms and is for informational purposes only. The views, target prices, and recommendations expressed are those of the respective brokerage firms and do not reflect the official policy or position of Financial Express. This should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor before making any investment decisions.