growth of 15% y-o-y to Rs. 6,556 crore during Q4FY2019. This was led by increased volumes (up 7% y-o-y), improved realisations (up 5% y-o-y) coupled with exchanged gain of 3%. Input cost pressures on account of rising crude prices and challenging environment in China in terms of commodity pricing and trade war scenario led to gross margin contraction of 57 BPS to 37.6%...

In line performance. Arysta's acquisition A strategic fit. UPL's 4QFY19 performance (excluding Arysta Lifescience's two months results) was largely in line with our estimates. The sales/EBITDA/Adj. PAT grew 15.2/0.9/23.5% YoY to ` 65.5/14.3/9.0bn, respectively. The adj.PAT growth of 23.5% YoY was primarily due to a decline in interest costs (down 59.3% YoY) and a lower tax rate (2.6% in 4QFY19 against 23.1% in 4QFY18). Sales rose 15.2% YoY, driven by a volume/value/exchange rate growth of 7.0/5.0/3.0% YoY, respectively. The 4QFY19 and FY19 results include the...

estimate: INR14.4b), with the margin expanding 50bp YoY to 21.9% (our estimate: 22%). Adj. PAT grew 39.5% YoY to INR10.7b in the quarter. Other income came in lower at INR590m (v/s INR1,180m in 4QFY18), but the impact was more than offset by a lower tax rate (2.8% v/s 17.7% in 4QFY18) and a decline in finance cost (INR2.6b v/s INR4.1b in 4QFY18). For FY19, revenue grew 14% to INR198.7b, with the margin expanding 60bp to 20.8%. Adj. PAT increased 17% to INR26.1b. Key highlights of Arysta consolidation: On incorporating Arysta's financials...

UPLL's revenue and EBITDA numbers (excluding Arysta's acquisition related Change in Estimates | Target | Reco adjustments) were largely in line with our estimates. It reported revenue of INR 85 bn in 4Q'19 vis--vis our estimate of INR 90 bn (UPL Group- INR 66 bn,...

4QFY19 results expectations: UPL has announced plans to consolidate Arysta financials for two months in 4QFY19 (February and March 2019). The 4QFY19 numbers, including Arysta, are not comparable to 4QFY18. The company's name remains unchanged as UPL post-Arysta takeover. The results are due on 26 April 2019. UPL pre-Arysta: We expect consolidated 4QFY19 PAT (before one-time integration costs of Rs650mn) at Rs9,485mn vs. Rs7,420mn a year ago (up 27.8%). We expect reported...

Indian generics agrochemicals company UPL Ltd (UPLL) is set for robust growth after the recent US$4.2bn all-cash buyout of global competitor Arysta LifeScience Inc. The Indian multinational is present across the entire crop protection chemicals (CPC) and seeds chain. UPLL caters to all categories focused on key crops and geographies, including Latin America (LatAm), its largest market. UPLL is present in 133 countries with 79% of its revenues coming from overseas markets. We forecast FY19-21E EPS CAGR of 41% for the UPLL-Arysta combine (including synergies). We initiate coverage on UPLL with a Buy rating and a target...

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).

The EU has passed a regulation (effective from Jan'19) to minimize the use of copper in crop protection products. The new regulation states that the permissible use of phy to sanitary products (pesticides, nematicides and rodenticides) containing copper compounds should be curbed. In this report, we analyze details of the regulation and its impact from UPLL's point of view.

LATAM drives revenue growth; steady volume growth Revenue rose by 13% YoY in Q2FY19 led by strong performance in India and LATAM businesses (contributing around 66% of total sales). LATAM business registered a strong revenue growth of 26% YoY in Q2FY19 led by decent growth across geographies in the region especially Brazil barring Argentina which was impacted by currency depreciation and overall economic situation. LATAM's revenue contribution has increased to 41% during the quarter from 37% in Q2FY18. Management expects strong performance to continue in LATAM in H2FY19 as well led by advance orders received in Brazil. Going ahead, we expect LATAM revenue to grow at a CAGR of 13% over FY18-20E on the back of strong...

Scales higher in the top five league globally: With Arysta's acquisition, UPL moves ahead in the global agri-chemical ranking and is now among the top five players. The acquisition is expected to provide significant benefits to UPL, as it complements UPL in many areas. Arysta is an asset-light company and a global provider of innovative crop-protection solutions, including...

Scales higher in the top five league globally: With Arysta's acquisition, UPL moves ahead in the global agri-chemical ranking and is now among the top five players. The acquisition is expected to provide significant benefits to UPL, as it complements UPL in many areas. Arysta is an asset-light company and a global provider of innovative crop-protection solutions, including...

In Brazil, UPLL primarily engages in soybean and maize (together account for 63% of the countrys total plantation area) and Arysta in sugarcane and cotton (19% of the countrys total plantation area). Moreover, UPLL has a strong presence in fungicides, while Arysta has a robust platform of bio solutions (#2 globally in bio stimulants) and seed treatment in Brazil. Brazilian farmers are enjoying strong demand for soybean, primarily due to the tense ties between the US and China. According to industry sources, China accounts for more than 60% of the soybean traded worldwide. This apart, Brazils producers are selling soybean at a premium soybean that were to be loaded in August fetched USD2.21/bushel more than Chicago futures as on July first week the widest gap since 2014. Where Unizeb Gold (brand of mancozeb) is sold at ~USD4 per unit in Brazil, Tridium fetches a realization of USD8-10 per unit.

We maintain Buy with a TP of Rs 719 (9x Sept'20 EV/EBITDA). UPL reported Sales/EBITDA/APAT growth of 12.9/16.2/18.4% to Rs 42.57bn/Rs 7.87bn/Rs 2.85bn respectively. PAT was weighed down by a higher tax rate (26.6% against 17.5% in 2QFY18) due to derivation of higher profits from India (attracting a higher tax rate).

EBITDA increased 17% YoY expanding 60bp YoY to 19.7% (in-line). PAT increased grew 12% YoY, EBITDA increased 15% YoY (margin up 50bp to 20.1%) and adj. We expect the momentum to continue in 2HFY19, with revenue growth of 12% YoY and margin expansion of 80bp YoY. LATAM is an important geography for UPPL accounting for 41% of overall revenue (v/s 37% in 2QFY18). Management has maintained its growth (10-12%) and margins guidance on account of the holistic growth prospects across geographies. We maintain our revenue/PAT CAGR (FY18-20) estimate of 44%/8%, and continue valuing UPLL at 13x Jun20 EPS (~15% discount to its three-year average trading multiple) on account of (a) highly leveraged balance sheet (due to Arysta acquisition) leading to increased D/E, (b) pressure on return ratios and (c) higher exposure to forex risk. However, with key drivers of growth in place, we maintain our price of INR749 (20% upside).

UPL's consolidated revenue for Q1FY19 came in at Rs 4134cr, an increase by 7.3% yoy. This was primarily driven by rise in revenue from Agro activities and Non-Agro activities by 7.6 per cent and 7.3 per cent yoy, respectively. The operating profit for the quarter stood at Rs 797 cr, a rise...

UPL reported revenue growth of 11% YoY to INR 41.34bn against our estimates of INR 41.06bn. The growth was led by steady growth from agro activities (+7.6% YoY) supported by higher growth from LATAM (+17% YoY) along with decent growth from India market (+12% YoY) due to low base. OPM expanded by 34bps YoY to 20.5%, which led EBITDA to up by 12.9% YoY to INR 8.5bn against our estimates of INR 8.15bn....

We now value UPL at 9.0x Jun'20 EV/EBITDA and maintain Buy with a revised target price of Rs 700 (implied P/E of 12.6x Jun'20 EPS). UPL reported Sales/EBITDA/APAT growth of 11.0/15.3/7.8% to Rs 41.3bn/Rs 7.97bn/Rs 5.15bn respectively. India business reported a growth of 11.0% YoY to Rs 12.4bn on a lower base, while Latam business showed a recovery with a growth of 17.2% YoY to Rs 8.6bn.

31 July 2018 increased 11% YoY to INR41.3b (est. of INR41.9b) in 1QFY19, driven by volume growth of 8% YoY and price increase of 1% YoY. EBITDA grew 12.9% YoY to INR8,470m (est. of INR8,638m), with the margin expanding 40bp YoY to 20.5% (est. Higher interest cost of INR1,750m (est. of INR790m) was partly offset by a lower tax rate of 9.2% (est.

UPL Corporation Ltd, international arm of the UPL (United Phosphorus Ltd), has entered into an agreement to acquire Arystra Lifesciences for US$4.2bn, making it to Top 5 in the world. UPL will now have sales of US$5bn & 20%+EBDITA margins (presynergies).Transaction provides UPL a perfect match with powerful synergies across geographie..

20 July 2018 UPLL boasts of an agrochemical product portfolio that is spread out across geographies and crops (including fruits & vegetables, rice, soybean and cotton). The acquisition will not only boost UPPLs product portfolio for crops where it already has a strong presence, but also in those where it has limited presence (e.g. wheat, barley, nuts and a wide variety of specialty crops). This apart, the acquisition will strengthen the companys product portfolio in the European cereal market, where its presence is currently limited to sugar beet, fruits (grape) and vegetables. As Arysta is multiple times larger than UPLL in both the aforementioned categories, we believe the acquisition help UPPL to transform into a true integrated crop solutions provider. Arysta relies on contract manufacturers for raw material sourcing from low-cost manufacturing countries like India, China and Eastern Europe. Post-acquisition, the sourcing cost of Arysta will reduce given UPLLs strong manufacturing base.