Please refer to important disclosures at the end of this report
1
UPL Limited is a global generic agrochemical company that provides crop
protection solutions. UPL derives strength from the dominant market position o
f
UPL in the global agrochemical market, synergies derived from acquisitions,
strong and diversified product portfolio, integrated and diversified operations
across geographies, healthy revenue growth and profitability margins and
comfortable liquidity position. UPL sales are driven by strong volume growth and
forex gains. UPL maintained its FY17 revenue growth guidance of 12-15% Yo
Y
with EBITDA margin expansion of 60-100bps YoY. Net debt was up `760cr QoQ
(YTD: `1650cr) led by higher working capital ahead of the Q4 season. However,
UPL expects to trim debt by `2000cr in Q4FY17 and by `300cr-400cr in FY17.
UPL has incurred a capex of `790cr in 9MFY17 and maintained its FY17 cape
x
guidance of `850cr-900cr. The company has reported consistent cash flow from
operations above `1400cr from last 4 years. The company has reported health
y
profit growth of 20.5% CAGR and return on equity of 20.7% for the last 3 years.
The Company has been maintaining a healthy dividend payout of 17.69%.
W
ith
strong presence in Brazil and India, it is expected that UPL is well positioned to
capture generic opportunity in a weak global agri-chem scenario. Hence Buy.
BUY
CMP `807
Stock Info
Sector
Beta
Bloomberg Code
Shareholding Pattern (%)
Promoters 27.7
MF / Banks / Indian Fls 12.5
FII / NRIs / OCBs 53.0
Indian Public / Others 6.7
Abs. (%) 3m 1yr 3yr
Sensex 7.4 13.6 28.2
UPL 8.1 49.8 253.9
.
52 Week High / Low 809/491
Avg. Daily Volume 1,28,231
Agrochemical
Market Cap (
`
cr) 40,197
2
BSE Sensex 29,656
Nifty 9,218
Face Value (
`
)
Reuters Code UPLL.BO
UPLL@IN
0.9
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
UPL
Others |
A
grochemical
April 25, 2017
UPL |
A
grochemical
pril 25, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement UPL
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
(
< -15
)