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United Phosphorus (UPL) figures among the top-5 generic agrichemical players in
the world, with a presence across major markets such as the US, EU, Latin America
and India.
Total off-patent market is worth US$29bn, of which a mere US$16bn is currently
being catered by generic players. Furthermore, 61% of the same is controlled by
the five largest generic players, including UPL. Moreover, entry of new players is
also restricted, given the high entry barriers by way of high investments. Thus,
amidst this scenario and on account of having a low cost base, we believe UPL
enjoys an edge over competition and is placed in a sweet spot to leverage the
upcoming opportunities in the global generic space.
Over FY2011-13E, we expect UPL to post a CAGR of 13% and 14% in sales and
PAT, respectively. At current valuations of 9.5x FY2013E EPS, the stock is attractively
valued vs. its global (10x) and domestic (17x) peers and historic average (15x). We
maintain our Buy view on the stock with a target price of `208.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
United Phosphorus (UPL) figures among the top-5 generic agrichemical players in
the world, with a presence across major markets such as the US, EU, Latin America
and India.
Total off-patent market is worth US$29bn, of which a mere US$16bn is currently
being catered by generic players. Furthermore, 61% of the same is controlled by
the five largest generic players, including UPL. Moreover, entry of new players is
also restricted, given the high entry barriers by way of high investments. Thus,
amidst this scenario and on account of having a low cost base, we believe UPL
enjoys an edge over competition and is placed in a sweet spot to leverage the
upcoming opportunities in the global generic space.
Over FY2011-13E, we expect UPL to post a CAGR of 13% and 14% in sales and
PAT, respectively. At current valuations of 9.5x FY2013E EPS, the stock is attractively
valued vs. its global (10x) and domestic (17x) peers and historic average (15x). We
maintain our Buy view on the stock with a target price of `208.
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