Ticker: 512070 Equity: Rs 42.71 crore H/L: Rs 425/228
United Phosphorus (UPL) incorporated is a leading global
producer of crop protection products, intermediates, specialty
chemicals and other industrial chemicals. The firstreason of recommending the scrip is, its presence in the
crop protection where the company is expected to grow at
a faster rate. The company also has a strong presence in
international markets like US, EU and Argentina. Here we
are also expecting a stronger growth in the international
markets also.
The company in the past has managed to show good
performance through the inorganic growth path and with
Rs 500 crore as cash available, we feel along with good
organic growth UPL is also expected to opt for inorganic
growth.
The good amount of growth can be also seen from the fact
that it has posted strong results in Q4FY08. Here the company
has posted strong financial performance by posting a
topline of Rs 419.81 crore and bottomline of Rs 58.79 crore
as compared to Rs 335.96 crore and Rs 29.18 crore respectively
in Q4FY07.
On the valuation front, the CMP of Rs 325 discounts its
FY09E earnings by 15.25x (EPS 22.50) and hence we recommend
the investor to buy the scrip at current levels with
a target price of Rs 430 in next one year.
(Karvy Consultants)
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