United Phosphorus Another acquisition in Brazil BUY :Emkay

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United Phosphorus

Another acquisition in Brazil

BUY

CMP: Rs 157                                       Target Price: Rs 215

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n     UPL announced acquisition of 51% stake in DVA Agro Brazil for $150mn from its parent DVA Agro

n     DVA Agro Brazil operates in Brazilian agrochemical market  across the segments with revenues of $130mn in CY2010

n     We understand that DVA margins are slightly lower than UPL’s (19%) however with debt free (only working capital) status it expected to be EPS accretive for UPL

n     Acquisition (2nd in last six months) to strengthen UPL’s foothold in fast growing Brazilian agchem market. We believe this to be favourable for UPL and reiterate BUY