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About the Company
United Phosphorus Limited (UPL) is the largest producer of agriculture chemicals in India. UPL produces crop protection products,
intermediaries, speciality chemicals and other chemicals. UPL has its presence across value added agri inputs ranging from seeds to
crop protection and post harvest activities. The company is a global player this area and has its presence in more than 120 countries.
The revenue from the overseas market contributes over 70% to the company’s total income.
The company has 21 manufacturing facilities. Among them, 9 are in India, 4 are in China, 2 in Spain and one each in UK, Argentina,
Vietnam, Netherland, Italy and China.
Investment Rationale
The company’s performance in the last couple of years was static due to the downtrend in global economy. Currently the business
scenario for the company is encouraging. The company offers a wide range of products and majority of them are manufacturing in
India which reduces its manufacturing cost. Various acquisitions enabled the company to have a large geographical spread. This
reduces the risk associated with a particular geography. Apart from this, UPL is having a number of strategic alliances with various
agrochemical manufacturers spread across the globe. This will again strengthen its distribution reach. Depreciating Rupee will
accelerate the revenue growth of the company as a major part its revenue comes from overseas
Valuation
At the current level the stock is trading at a P/E of 9.07x for FY12E and 6.52x for FY13E. On the basis of price to book value the
stock is currently trading at 1.38x and 1.14x for FY12E and FY13E respectively. Consolidated revenue and PAT are expected to
grow at a CAGR of 19% and 23% over FY10 to FY13E. We recommend to buy this scrip with a target price of ` 180 per share.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
About the Company
United Phosphorus Limited (UPL) is the largest producer of agriculture chemicals in India. UPL produces crop protection products,
intermediaries, speciality chemicals and other chemicals. UPL has its presence across value added agri inputs ranging from seeds to
crop protection and post harvest activities. The company is a global player this area and has its presence in more than 120 countries.
The revenue from the overseas market contributes over 70% to the company’s total income.
The company has 21 manufacturing facilities. Among them, 9 are in India, 4 are in China, 2 in Spain and one each in UK, Argentina,
Vietnam, Netherland, Italy and China.
Investment Rationale
The company’s performance in the last couple of years was static due to the downtrend in global economy. Currently the business
scenario for the company is encouraging. The company offers a wide range of products and majority of them are manufacturing in
India which reduces its manufacturing cost. Various acquisitions enabled the company to have a large geographical spread. This
reduces the risk associated with a particular geography. Apart from this, UPL is having a number of strategic alliances with various
agrochemical manufacturers spread across the globe. This will again strengthen its distribution reach. Depreciating Rupee will
accelerate the revenue growth of the company as a major part its revenue comes from overseas
Valuation
At the current level the stock is trading at a P/E of 9.07x for FY12E and 6.52x for FY13E. On the basis of price to book value the
stock is currently trading at 1.38x and 1.14x for FY12E and FY13E respectively. Consolidated revenue and PAT are expected to
grow at a CAGR of 19% and 23% over FY10 to FY13E. We recommend to buy this scrip with a target price of ` 180 per share.
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