Technology

UPL posted good set of numbers for 1QFY2018. Sales came in at `3,723cr v/s.
`3,644cr, a yoy growth of 7.8%. On operating front, the Gross profit margins
came in at 59.2% v/s. 53.6% in 1QFY2017, which in part aided the OPM to come
in at 18.6% v/s. 17.7% in 1QFY2017. The expansion in OPM was lower than the
expansion in gross profit margins mainly aided by a lower sales growth during the
quarter. Thus, net profit came in at `475cr v/s. `362cr in 1QFY2017, a yoy growth
of 31.2%. Adj. net profit came in at `491cr v/s. `387cr, a yoy growth of 27.1%.
Management maintained FY2018 guidance for 12-15% revenue growth, 50-75
bps Ebitda margin expansion, and a 20-22% effective tax rate. UPL posted good set of numbers for 1QFY2018. Sales came in at `3,723cr v/s.
`3,644cr, a yoy growth of 7.8%. On operating front, the Gross profit margins
came in at 59.2% v/s. 53.6% in 1QFY2017, which in part aided the OPM to come
in at 18.6% v/s. 17.7% in 1QFY2017. The expansion in OPM was lower than the
expansion in gross profit margins mainly aided by a lower sales growth during the
quarter. Thus, net profit came in at `475cr v/s. `362cr in 1QFY2017, a yoy growth
of 31.2%. Adj. net profit came in at `491cr v/s. `387cr, a yoy growth of 27.1%.
Management maintained FY2018 guidance for 12-15% revenue growth, 50-75
bps Ebitda margin expansion, and a 20-22% effective tax rate. We maintain
recommend a reduce given the valuations.

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