UPL Ltd. is a global agricultural solutions company engaged in the agrochemicals and industrial chemicals business with manufacturing sites across the world. Through recent expansion, the company has become a...

UPL 4QFY20 results were a significant beat vs NBIE estimates Consolidated adjusted PAT came in at Rs7.88bn vs our estimate of Rs2.4bn and Bloomberg estimate of Rs8.8bn. The beat on revenue was driven by significantly positive volume growth across LatAm, US and RoW bucking the COVID-19 related disruption, which underpinned our degrowth assumptions. Margins however were a miss - gross margin stood at 44% vs our estimate of 47%, while EBITDA margin came in at 17.1% vs our estimate of 17.9%. We have raised earnings by 6.3%/20.8% for FY21E/FY22E based on upbeat commentary on growth and margin expansion by UPL management during earnings call. Management also expects to monetize the R&D; pipeline on...

We have upgraded our topline/EBITDA/APAT by 3%/3.6%/11% for FY21E and 2.6%/0.6%/5.8% for FY22E but lowered our target price from Rs542 to Rs497 based on 7.0x FY22E EV/EBITDA (implied P/E on TP- 11x) due to lower than expected debt reduction (considering perpetual bond as part of debt). UPL...

On like-to-like basis (i.e. including Arysta in 4QFY19), revenue grew 26% YoY Note that EBITDA growth of 25% in 4QFY20 was driven by cost and revenue synergies; excluding the same, EBITDA remained flat (refer For FY20, like-to-like revenue/EBITDA grew 13%/18%; revenue growth was driven by 16% volume growth, offset by 1% decline in prices and 2% forex In 4QFY20, strong revenue growth was witnessed across regions (North According to management, for 4QFY20/FY20, cost synergy realized from the Arysta acquisition stood at INR2.4b/INR7.7b and revenue synergies at Draft proposal on banning 27 pesticides in India would not impact the Cost synergy of USD150m, revenue synergy of USD200m and UPLL is aiming to reduce Net Debt to EBITDA to 2x by FY21 from 2.9x as at UPLLs FY20 revenue/EBITDA (like-to-like) grew 13%/18%, primarily driven by synergy benefits; excluding the same, base business (UPLL and Arysta; ex-synergy) operating performance remained flat (refer Additionally, net debt reduced by INR44b in FY20 (in line with guidance).

UPL's Q4 EBITDA was below our estimate at Rs 19bn as stronger revenue growth was offset by gross margin pressure and higher forex loss.

UPL saw a sharp 16% rally on Thursday post an exchange filing regarding US$900mn reduction in net debt during FY20E. The spike in the stock price after this announcement during trading hours has priced in the sharp reduction in FY20E net debt by 20.8% to US$2.9bn. We maintain Buy on UPL with an unchanged TP of Rs484 (+15% from CMP), valuing it at 10.3x PE on FY22E EPS based on (i) healthy long-term prospects in UPL-Arysta portfolio and (ii) relative immunity of the farm chemicals sector from the COVID 19 related disruption. We have not changed our FY20E-FY22E as we await the 4Q...

We maintain Buy on Indian CPC MNC UPL with our reduced TP of Rs484 (+62.6% from CMP) on account of long term prospects in UPL Arysta portfolio and immunity of the farm chemicals sector from the COVID 19 related disruption. We have cut our TP by 31.2% based on 8.4%/8.6%/14.5% cut in FY20E/FY21E/FY22E EPS and have valued UPL on a lower PE of 10.3x vs. 14.5x earlier after rolling over to FY22E - to account for potential balance sheet related risks (due to the high leverage) and persistent increase in working capital. The prospects for reducing the leverage depend heavily on potential synergy benefits from the Arysta merger,...

We explore UPL's stock potential under three scenarios and find a convincing case for +100%/200% returns in our base/bull case over the next three years.

UPL Ltd. is a global agricultural solutions company engaged in the agrochemicals and industrial chemicals business with manufacturing sites across the world. Through recent expansion, the company has become a...

UPL Corporation Limited, Mauritius, a subsidiary of UPL Ltd, is considering issue of USD denominated Perpetual Subordinated Capital Securities ($ PNC5.25 Reg S) - to refinance the US$550mn debt by March 2020. Global road shows are on for the offering with pricing expected today. Moody's Investors Service has assigned a Ba2 long-term Junior Subordinated rating to the undated fixed-to-reset rate notes (hybrid), as compared to UPL's current rating of Baa3 (stable). According to Moody's Vice President Kaustubh Chaubal, the Ba2 rating is two notches below UPL's Baa3 issuer rating because the hybrid notes are deeply subordinated to other debt in the company's capital structure. These notes are quasi equity and receive basket C treatment under...

UPL Ltd. United Phosphorous (UPL) is a producer of crop protection products, intermediates, specialty chemicals and other industrial chemicals, was incorporated in the year 1969.

UPL quarterly profit meets estimates as Latin America business shine. UPL's Revenue from operations surged 80.69% to Rs 8,892 crore in Q3 December 2019 as compared to Rs 4,921 crore in Q3 December 2018. Profit before tax in the December quarter stood at Rs 1,037 crore, up 107.40% from Rs 500 crore in Q3 December 2018. Total expenses in the December quarter stood at Rs 7,800 crore, up 78.61% from Rs 4,367 crore reported in the December quarter last year. Profit after tax in the December quarter stood at Rs 761 crore, up 40% from Rs 544.17 crore in Q3 December 2018....

UPL results were a beat vs NBIE and the street Adjusted PAT came in at Rs7.76bn vs our estimate of Rs4.2bn and Blomberg estimate of Rs7.4bn. Gross margin came in line at 42%. EBITDA margin was a beat at 23.6% vs 3QFY20E of 18.5%. We have raised earnings by 23%/6% for FY20E/FY21E. We maintain Buy based on 29.7% upside from CMP to our revised PE-based TP of Rs704 (up 2.6%). Key catalysts: i) potential improvement in margins and cash flows from higher value products as well as Arysta merger synergy to support 40.5% EPS CAGR over FY2022E ii) likely easing of working capital pressures and reduction in net debt/EBITDA ratio from 6.82x in FY19 to 2.05x by FY22E, which should address concerns over the debt overhang iii) Attractive FCF yield of 12.1% on FY22E and iv) stock trades at attractive valuation at 11.2x PE on...

Gaining market share in many geographies and segments: UPL continues to gain market share in Brazil across major crops like Soybean, Corn, Coffee, Sugarcane and plantation crops driven by cross selling opportunities as UPL is strong in Mato Grasso region while Arysta is strong in South of Brazil. There has also been significant market share gain in North America and in...

We met UPL management on Friday and returned positive on longer term prospects on the UPLArysta combine based on UPL's robust footprint in LatAm especially Brazil; and Arysta's strong foothold in Eastern Europe and Africa, with steady outlook for business in the US and Western Europe. Added positives include the company's plans to add 2 new products in each market every year to meet its innovation rate target of 15% of revenue and visible progress on merger synergies, having already achieved more than 50% of the FY20E target of US$80mn, at the halfway mark. The management also sounded positive on near term outlook, especially for LatAm based on (i) the delayed pick-up in sowing data for key crops and soya rust infestation and (ii) encouraging performance of UPL's Spectro (insecticide) as well as Arysta'sClethodim (herbicide) in Brazil, a...

UPL 2QFY20 results have come in line with NBIE estimates at the topline of Rs78bn. Gross margins were better than expectations by 84 bps, contributed by reduction in raw material expenses. EBITDA margin came in higher at 18.5% vs our estimate of 17.7% on revenue reported at Rs78bn. Consolidated reported PAT has come in 65% lower vs. NBIE estimates due to onetime exceptional cost related to punitive damages of Rs2.2bn awarded against the company by a trial jury in the Agro Fresh litigation. Adjusted PAT came in at Rs3.94bn vs. our estimate of Rs3.24bn. During the call, the management sounded optimistic about improved volumes (across Emerging Markets and Europe), operating leverage and synergy benefits to support long term growth prospects. However, the overall 1HFY20 run rate in revenue as well as PAT is lagging...

UPL has wide product basket which includes herbicides (29%), fungicides (26%), insecticides (25%), seeds (9%) and others (11%) covering a variety of crops including rice, wheat, cotton, soya, sugar beet, fruits & vegetables. Its product portfolio is across the entire crop protection and seed chain.

Q1 growth due to M&A; FY20 target optimistic UPL Ltd. is a global agricultural solutions company engaged in the agrochemicals and industrial chemicals business with manufacturing sites across the world. Through recent expansion, the company has become a...

UPL's FY19 annual report highlighted a) potential opportunities in Arysta Change in Estimates | Target | Reco Lifescience, b) its initiatives towards manufacturing key molecules and achieving self-sufficiency, c) immense growth prospects for glufosinate and...

UPL quarterly profit dives by 91% , misses estimates UPL is a global generic crop protection, chemicals and seeds company. The company is engaged in the business of agrochemicals, industrial chemicals and chemical intermediates. Its consolidated net profit fell 65.1% to Rs 178 crore on 91.2% rise in net sales to Rs 7906 crore in Q1 June 2019 over Q1 June 2018....