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Last Updated : Jun 19, 2019 03:51 PM IST | Source: Moneycontrol.com

Accumulate UPL; target of Rs 1142: KR Choksey

KR Choksey recommended accumulate rating on UPL with a target price of Rs 1142 in its research report dated May 23, 2019.

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KR Choksey's research report on UPL


UPL reported a revenue growth of 49.8% YoY and 73.2% QoQ to INR 85.2 bn driven by strong performance across the LatAm and European regions. OPM declined by 486 bps YoY and 411 bps QoQ to 16.5% which led EBITDA at INR 14.1 bn. Net profit declined by 64.3% YoY and 43.8% QoQ to INR 2.06 bn due to lower other income, exceptional costs as well as foreign exchange loss for the quarter. Forex loss as reported at INR 1.2 bn (v/s forex gains of INR 2.0 bn in Q4FY18) while exceptional costs were significant at INR 3 bn related to acquisition of Arysta (acquisition, litigation costs). Other income was down 59.3% YoY (+29.7% QoQ) to INR 480 mn. On a proforma basis (excl. Arysta), UPL’s revenue were up by 15.2% YoY to INR 6.6 while OPM increased to 21.8% (+40 bps YoY). Proforma PAT was reported at INR 8.6 bn (+17.5% YoY). The board has declared a dividend of INR 8/share on a FV of INR 2. It has also announced a bonus of 1 equity share of INR 2 for every 2 fully paid-up share.


Outlook


We valued the company by assigning a P/E multiple of 20x on the FY20E EPS of INR 57.1 and arrived at a target price of INR 1,142.0 (potential upside – 12.4% ). We have an ACCUMULATE rating on the stock.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

First Published on Jun 19, 2019 03:51 pm
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