Nifty50 constituent UPL's shares jumped nearly 3 per cent to touch an intraday high of Rs 800 per share on the BSE on Tuesday. The price movement could be attributed to better-than-expected March quarter numbers. The robust results has also induced new optimism in several brokerages as they estimate up to 42 per cent upside in the stock. 

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The company reported revenue and EBITDA growth of 24 per cent and 28.4 per cent, respectively, year-on-year (YoY). Adjusted net profit was up 18.1 per cent YoY. Gross margin expanded 369 basis points (bps) YoY due to timely price hikes.  

However, the EBITDA margin was up only 78bps YoY due to higher other expenditures. During the quarter, volume growth was 3 per cent and realization led growth was 19 per cent YoY.  The management guided for 10 per cent revenue growth and 12-15 per cent EBITDA growth in FY23E.  

CLSA says UPL reported revenue above its expectations in all geographies except Europe and gives a Buy call on the stock with a target price at Rs 1,100 per share. This translated into a 42 per cent upside. Debt reduction and transition to differentiated products are key to rerating of the stock, it said 

Similarly, domestic brokerage firm ICICI Securities upgrade earnings estimates due to better-than-expected performance in Q4FY22 and expected reduction in finance costs and higher margins.  

The brokerage sees revenue and earnings CAGR of 9.3% and 18.1%, respectively, over FY22-FY24E with RoCE > cost of equity and maintain ADD rating on the stock with a target price of Rs 852 per share (10 per cent upside), implying 11x of FY24E EPS. 

"We note the company enjoys 8% market share in the global crop protection market in FY22, which it plans to raise to 9- 11% by FY27 and it is well-positioned to gain market share with the continuous launch of differentiated products which have relatively better margins," ICICI Securities said in a note.