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UPL stock price spikes 9% to 52-week high after earnings beat estimates

The agrochemical company's consolidated profit has risen 74 percent year-on-year to Rs 1,361 crore on strong operating growth.

May 14, 2021 / 11:09 AM IST
 
 
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UPL share price jumped over 9 percent intraday on May 14 after the agrichemicals company reported an all-round beat on March 2021 quarter earnings, with consolidated profit rising 74 percent year-on-year to Rs 1,361 crore.

The profit was also higher due to lower exceptional cost at Rs 80 crore in Q4FY21 against Rs 171 crore in the corresponding period of the previous fiscal, the company said on May 12.

Exceptional cost of Rs 80 crore reported for the quarterly mainly included the cost related to restructuring in Europe, provisions related to litigation costs in North America and fire incident in India, the company told BSE.

Consolidated revenue from operations grew by 14.8 percent to Rs 12,796 crore compared to the year-ago quarter, with volume growth at 18 percent and a price increase of 1 percent, the company said.

Also Read: UPL Q4 earnings beat estimates, profit jumps 74%; FY21 EBITDA exceeds guidance

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The company's board has recommended a dividend of Rs 10 per equity share.

The stock was trading at Rs 754.15, up Rs 62.55, or 9.04 percent, at 1041 hours. It has touched a 52-week high of Rs 757.60. It has touched an intraday high of Rs 757.60 and an intraday low of Rs 707.55.

The scrip also witnessed a spurt in volume by more than 3.6 times and was trading with volumes of 1,183,112 shares compared to its five-day average of 375,217 shares, an increase of 215.31 percent.

On the operating front, EBITDA (earnings before interest, tax, depreciation and amortisation) rose 31 percent year-on-year to Rs 2,839 crore, and margin increased by 270 bps YoY to 22.2 percent in the quarter ended March 2021, driven by strong margin and cost synergies. The CNBC-TV18 poll estimates for EBITDA and margin were Rs 2,587 crore and 21.3 percent, respectively.

Global research firm JP Morgan has an "overweight" call on the stock, with the target at Rs 760 a share. It is of the view that positive earnings momentum is likely to continue, adding the company's net debt reduction needs to accelerate. The company is well-positioned to gain in the current environment. Strong crop prices will continue to drive net debt reduction, it added.

Kotak Institutional Equities has a sell rating but has raised the target to Rs 650 a share. The brokerage firm is of the view that Q4 earnings were above estimate, led by higher revenue growth and gross margin. However, net debt/EBITDA was marginally disappointing. The company's focus on innovation and in-licensing agreement should drive revenue growth and margin.

Kotak raised FY22/23 EBITDA estimates by 10 percent/15 percent and said limited FCF Gen and consistent newsflow around governance limited re-rating.

Disclaimer: The views and investment tips expressed by investment experts 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.
Moneycontrol News
first published: May 14, 2021 11:09 am

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