UPL Ltd Falls 15.26%: Key Factors Behind the Sharp Weekly Decline

23 February 2026: Intense Selling Pressure and Heavy Trading Volume

UPL Ltd’s week began with a sharp decline on 23 February, as the stock price plunged 14.25% to close at Rs.644.65, marking an intraday low of Rs.690.1 earlier in the session. This represented a significant underperformance against the Sensex, which rose 0.39% to 36,817.86. The stock opened with a gap down of 3.15%, reflecting immediate bearish sentiment.

Trading volume was robust at over 1.33 million shares, with a total traded value exceeding ₹203 crores, placing UPL among the most actively traded stocks by value that day. Despite the heavy turnover, the stock’s price continued to fall, touching an intraday low of Rs.625.55, a 16.85% drop from the previous close. This sharp decline was accompanied by elevated volatility and a weighted average price indicating most trades clustered near the lows, signalling dominant selling pressure.

Institutional interest intensified, with delivery volumes rising 47.46% above the five-day average, suggesting active repositioning by long-term investors. However, the stock traded below all major moving averages (5-day through 200-day), confirming a bearish technical setup. The Pesticides & Agrochemicals sector also declined by 4.15%, but UPL’s sharper fall highlighted company-specific concerns or profit-booking pressures.

Derivatives Market Activity: Open Interest Surges Amid Bearish Momentum

On the same day, UPL’s derivatives segment saw a dramatic 60.72% surge in open interest, rising to 66,999 contracts. This increase, coupled with a trading volume of over 207,000 contracts and a notional value exceeding ₹3.28 lakh crores, indicated heightened speculative and hedging activity. The spike in open interest alongside falling prices typically suggests fresh short positions or put buying, reflecting bearish market sentiment.

The elevated options notional value pointed to active use of protective strategies or bearish spreads by traders. Despite the short-term price weakness, UPL’s Mojo Score was upgraded to 71.0 with a Buy grade on 19 February, signalling underlying fundamental strength amid tactical market repositioning.

Technical Momentum Shifts Amid Mixed Signals

Despite the sharp price decline, UPL’s technical indicators presented a nuanced picture. The overall trend shifted from bullish to mildly bullish, reflecting moderated buying pressure. The weekly MACD turned mildly bearish, while the monthly MACD remained bullish, indicating short-term caution but longer-term upside potential.

The Relative Strength Index (RSI) hovered in neutral territory on both weekly and monthly charts, suggesting no extreme momentum. Bollinger Bands indicated a contained volatility within an upward channel, supporting a mildly bullish bias. Daily moving averages showed the stock positioned above short-term averages, providing dynamic support despite recent weakness.

Other oscillators such as the Know Sure Thing (KST) and Dow Theory assessments showed mixed weekly and monthly signals, underscoring the complexity of the current technical landscape. On-Balance Volume (OBV) trends were bullish, signalling accumulation by institutional investors despite price softness.

This technical complexity suggests a consolidation phase with potential for either a pause or a directional move, warranting close monitoring by traders and investors.

24 February 2026: Downgrade to Hold Reflects Cautious Outlook

Following the volatile trading on 23 February, MarketsMOJO downgraded UPL Ltd’s rating from Buy to Hold on 24 February 2026. This decision was driven by a balanced assessment of financial, valuation, and technical factors. While the company reported strong earnings growth—profit after tax surged 87.43% to ₹879.05 crores over six months and profit before tax excluding other income rose 144.23%—certain quality metrics raised caution.

UPL’s return on equity (ROE) remained modest at 9.43%, and its Debt to EBITDA ratio was elevated at 3.70 times, indicating leverage concerns. Operating profit growth over five years was subdued at 1.64% annualised, tempering enthusiasm despite recent earnings momentum.

Valuation metrics showed the stock trading at a discount, with an enterprise value to capital employed ratio of 1.4 and a PEG ratio of 0.1, reflecting a disconnect between earnings growth and share price performance. The stock’s one-year return was -0.23%, underperforming the Sensex’s 10.6% gain.

Technical indicators also contributed to the downgrade, with a shift to mildly bullish trends and mixed momentum oscillators. The stock’s price volatility and proximity to its 52-week low of Rs.580 reinforced a cautious stance. The downgrade to Hold, with a Mojo Score of 64.0 and Market Cap Grade of 2, signals a recommendation to maintain positions rather than initiate new buys at current levels.

Subsequent Trading Days: Minor Recovery and Continued Volatility

On 24 February, UPL’s stock price declined further by 2.20% to Rs.630.45, while the Sensex fell 0.78%. The following day, 25 February, the stock slipped another 0.75% to Rs.625.75, marking the week’s lowest close. Volume tapered significantly, indicating reduced trading interest amid uncertainty.

On 26 February, the stock rebounded 2.35% to Rs.640.45, outperforming the Sensex’s 0.19% gain, suggesting some short-term buying interest. However, on the final trading day, 27 February, UPL slipped 0.53% to close at Rs.637.05, while the Sensex declined 1.16%, reflecting persistent volatility and cautious sentiment.

Key Takeaways from the Week

Significant Underperformance: UPL Ltd’s 15.26% weekly decline starkly contrasts with the Sensex’s 0.96% fall, highlighting company-specific challenges amid broader market stability.

Volatile Trading and Heavy Institutional Activity: The week saw intense selling pressure, high value turnover, and a surge in derivatives open interest, signalling active repositioning and bearish sentiment among traders.

Mixed Technical Signals: While short-term momentum weakened, longer-term indicators and volume trends suggest accumulation and potential for recovery, though caution remains warranted.

Downgrade Reflects Balanced View: The shift from Buy to Hold by MarketsMOJO underscores the tension between strong recent earnings growth and concerns over leverage, profitability, and technical uncertainty.

Sectoral and Market Context: The Pesticides & Agrochemicals sector faced headwinds, but UPL’s sharper decline indicates company-specific factors influencing investor sentiment.

Conclusion: A Week of Sharp Correction Amid Mixed Signals

UPL Ltd’s stock experienced a pronounced correction this week, driven by a combination of heavy selling, volatile trading, and a cautious reassessment of fundamentals and technical momentum. Despite strong earnings growth and an upgraded Mojo Score earlier in the month, the stock’s sharp decline and downgrade to Hold reflect investor concerns over debt levels, profitability, and near-term price risks.

The surge in derivatives open interest and institutional delivery volumes suggests active repositioning, with market participants balancing bearish bets against potential medium-term recovery. Technical indicators present a complex picture, with mildly bullish longer-term trends tempered by short-term weakness and mixed momentum signals.

Investors should remain vigilant to evolving market conditions and sector developments, recognising that UPL’s current valuation discount and market leadership provide a foundation amid ongoing volatility. The stock’s performance next week will be critical in determining whether the recent weakness stabilises or extends further.

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