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United Phosphorus |
MAI deal signifies investment opportunity in UPL |
BUY
CMP: Rs 161 Target Price: Rs 230
n ChemChina has proposed to acquire MAI (a leading global generic crop protection company) at US$ 2.4 bn
n The deal signifies investment opportunity in UPL since UPL’s current valuations at EV/EBITDA of 6x are at 40% discount to proposed deal’s valuations
n UPL’s management may lower its guidance for FY11 by ~20% which poses near term risk to the stock
n Despite near term risks, we believe that investors can buy this stock at current levels with 18 months target of Rs 230
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