Hold UPL; target of Rs 534: KR Choksey

hold

KR Choksey's research report on UPL

UPL’s revenue missed our estimate (-2.9%) due to a steep decline in price realization. The EBITDA missed our estimate due to better-thanexpected operating expenses and liquidation of high-cost inventory. We believe the short-term pain will persist due to the use of high-cost inventory in upcoming quarter and ongoing price decline which will likely continue to pressure margins. However, we expect a recovery in H2FY25E, supported by anticipated improvements in the supply chain and sustained volume growth.

Outlook

Currently, the stock is trading at PE multiples of 17.1x/11.3x, based on FY25E/FY26E EPS, respectively. We assign a P/E multiple of 11.4x (maintained) on FY26E EPS of INR 46.7 (maintained) to arrive at a target price of INR 534/share (maintained). Given the 1.0% upside potential, we maintain our “HOLD” 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.

UPL - 070824 - kr