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Last Updated : Oct 01, 2020 01:26 PM IST | Source: Moneycontrol.com

Buy UPL; target of Rs 632: Sharekhan

Sharekhan is bullish on UPL has recommended buy rating on the stock with a target price of Rs 632 in its research report dated September 30, 2020.

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Sharekhan's research report on UPL


 Management expects sustainable 7-8% revenue growth, backed by focus to increase share of BioSolutions and product innovation. Long-term EBITDA margin guidance of 24-25% (vs. 19% in FY2020) led by high-margin products and cost synergies. Q2FY2021 to witness improved revenue growth from Latin America, healthy growth in India, and flat revenue trend in Europe and the US. Reiterated FY2021 revenue/EBITDA growth guidance of 6-8%/10-12%. Expect FCF generation of Rs. 12,584 crore over FY21E-FY23E (led by 16% PAT CAGR and efficient WC cycle) to reduce net debt/EBITDA to 1.8x by FY23E vs. 3.2x in FY20.


Outlook


We maintain our Buy rating on UPL with a revised PT of Rs. 632 (higher PE multiple of 13x and rollover of target multiple to FY23E EPS).Improving earnings outlook and balance sheet deleveraging to be key rating catalyst.


For all recommendations report, click here


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First Published on Oct 1, 2020 01:26 pm
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