711.70
7.00%
Motilal Oswal
PAT grew 6% YoY to INR15,510m. Growth was robust across key geographies (+36.6% YoY in Europe, +26.5% YoY in LATAM, +21.5% YoY in North America and +12.7% YoY in RoW), barring India (-20.8% YoY), where poor Kharif yield and erratic rainfall resulted in stressed cash flow for farmers. UPLL also faced restriction on the sale of organophosphorus products in a few states in India, which impacted the top line (to the tune of INR300-400m on an annualized basis). UPLLs performance in Europe has been a highlight, with the geography growing at 15.4% YoY in 9MFY19 against an estimated industry decline of 10% in CY18. We maintain our estimates (revenue/PAT CAGR of 32%/18% over FY18-21), factoring in the financials of Arysta in FY20E and FY21E. We roll over the target price to FY21E EPS, valuing UPLL at 13x (~15% discount to its three-year average trading multiple, primarily due to the expectedly high leverage in the balance sheet post Arysta acquisition).
UPL Ltd.'s price crossed above 30Day SMA today
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