Prabhudas Lilladher's research report on UPL
UPL reported 4QFY22 revenue/EBITDA/PAT of Rs158.6bn/Rs35.9bn/Rs15.1bn (+24%/+27%/+34% YoY). Results were ahead of our and consensus estimates. Key highlights are: (a) volume and price growth of 3%/19%YoY respectively; (b) all geographies barring Europe posted double digit growth; (c) gross margin improved 370bps YoY aided by favorable product and superior pricing; (d) EBITDA margins up 40bps YoY to 22.6%; (e) Net debt (including perpetual bond) stood at ~Rs219bn, flat YoY (down Rs48.6bn sequentially); (f) Net debt down USD91mn YoY; (g) NWC has declined by 2 days YoY to 69. Going forward, citing positive demand scenario globally, UPL sounded confident to achieve revenue and EBITDA growth guidance of 10% and 12- 15% YoY in FY23E, with growth to be driven by focus on differentiated solutions and new product launches. While, the company expects to reduce debt by USD400mn in FY23. We broadly maintain our FY23/24 estimates.
We expect UPL to clock Revenue/PAT CAGR of 9%/19% over FY22-24E. Maintain ‘BUY’ with a revised TP of INR1010 (earlier Rs980) based on 14xFY24E EPS.
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