UPL shares jump 5% on speciality chemical business prospects
The brokerage said Superform is targeting revenue growth of 20–23% annually, with phosphorus and cyanide chemistries emerging as key growth drivers
On Monday, UPL Ltd shares experienced a 5% increase to ₹514 following brokerage reports that highlighted the growth prospects of Superform, the company's specialty chemicals business subsidiary. Superform is projected to achieve annual revenue growth of 20-23%, with phosphorus and cyanide chemistries identified as key growth drivers.
The subsidiary is expanding into battery chemicals, aiming to capitalize on the demand for specialized materials and diversify global supply chains beyond China. Motilal Oswal Financial Services report noted that Superform intends to accelerate specialty-chemicals growth, targeting a 45-50% contribution to total revenue and a 20% revenue compound annual growth rate.
The business plans to invest $100 million to $125 million annually through FY30 to support its expansion. UPL's global manufacturing and distribution network, consisting of over 40 facilities in 11 countries and a presence in 130 countries, provides Superform access to international customers without the need to establish a distribution network from scratch.
The brokerage also emphasized Superform's backward and forward integration, which could enhance supply-chain resilience, reduce reliance on external suppliers, and improve cost competitiveness. The China plus 1 trend is anticipated to offer additional growth opportunities, as customers seek alternatives to Chinese suppliers in specialized chemical categories.
Superform is increasing its cyanide capacity from 17,000 tonnes to 50,000 tonnes, with a long-term goal of reaching around 200,000 tonnes. The company is also exploring opportunities in battery materials, with commercialization expected within the next 18-24 months. Superform is engaging electrolyte manufacturers to seek suppliers outside China and is exploring sodium-ion battery materials, including cyanide-based Prussian Blue and Prussian White cathode materials used in energy-storage applications.
Motilal Oswal projects UPL's revenue, EBITDA, and adjusted profit after tax to grow at compound annual growth rates of 7%, 9%, and 28% through FY28.
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