United Phosphorus (UNPO.BO, Buy, PT Rs210, 51% upside) UBS: India Mid-Caps TOP PICKS - September 2011

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• Leading Indian generic crop protection company, fastest
growing global agrochemicals company in the world; leveraged
to increasing global agricultural output
• Well diversified product/customer/geographical portfolio, strong
distribution network, successful M&A track record
• Key competitors becoming less aggressive; implying good
opportunities for UPL; focus on branded products over long
term to aid higher margins
• Generic opportunity attractive - US$5.5bn-worth products off
patent by 2014; Focus on high-growth markets in Brazil and
India
• Sales growth of 11% over FY11-13E and EBITDA margin
expansion; management targets to more than double revenues
over 5 years, with higher margins. Strong demand outlook and
proactive management likely to sustain long-term growth
• Shareholding: Promoter 27%
• Valuation: DCF using UBS’s VCAM tool (assume WACC of
12.32% and terminal growth rate of 5.4%). Implied FY13E PE
of 10.1x

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