For 2QFY2017, United Phosphorous (UPL) posted a growth of 7.2% yoy in sales to
Rs3,510cr. The volume growth during the period was of 23% yoy, while price
decrease contributed around 5% yoy. The exchange rate, on the other hand, had a
positive impact of 1% yoy. Including Advanta sales, the company posted sales of
`3510cr, posting a yoy growth of 7.2%. On the operating front, the gross margin
(Including Advanta) came in at 42.3% (vs. 41.1% in 2QFY2016), which led the
OPM to come in at 19.9% (vs. 18.9% in 2QFY2016). The company posted a 25.2%
yoy growth in its Adj. PAT for the quarter, excluding the extra-ordinaries and profits
from associates and subsidiaries. The management has maintained guidance of
12-15% revenue growth (owing to presence in fast-growing countries) and 60-100bps
improvement in EBITDA margin. We maintain our neutral rating on the stock.
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