UPL Ltd. share price target

Net sales grew by 7% to ` 56.9bn lower than our estimate by 6%. Volume growth during the quarter was 8% and exchange impact of -1%. Adjusted EBITDA grew by 9% to ` 12.2bn higher than our estimate by 3%. PAT degrew by a percent to ` 7.4bn. North America, Latin America and Europe grew by 7% while India and RoW grew by 6% and 5% respectively. In FY18, industry witnessed a de-growth of 0.2% while UPL outperformed the industry with a 7% growth and constant currency growth of 9%. UPL...

We maintain BUY with a TP of Rs 851/sh (16x FY20E EPS) For 4QFY18, UPL reported muted revenues at Rs 56.91bn (+6.5% YoY). Volume growth of +8% was negated net cross currency movement of -1%. EBITDA stood at Rs 14.21bn (+36.4% YoY), as margins expanded to 25.0% (+554 bps YoY). EBITDAM expansion was driven by higher gross margins (+90bps YoY), lower employee costs (-49bps YoY) and drop in other expenditures & exchange difference (-415bps YoY). Reported APAT at Rs.7.36bn (-0.7% YoY) was muted as a result of higher interest costs (+92.5% YoY) and higher tax rate (17.6% +1042bps YoY).

UPL posted volume growth of 8% yoy, driven by steady performance in LatAM and Europe. However, inability to take price increase (due to higher channel inventory) and adverse currency movement of 1% resulted in 7% yoy growth in net revenue to Rs56.9bn. Gross margin improved by 90bps yoy to 49% while EBITDA margin expanded by 30bps yoy to 21.4%. EBITDA grew by 8% yoy to Rs12.2bn, broadly in line with our estimate....

A consistent outperformer in a challenging industry UPL reported 4Q18 Revenue/EBITDA/PAT of INR 57bn / INR 12.2bn / INR 7.7bn (+7%/+8%/+6% YoY respectively), in-line with JMFe of INR 59.1bn/11.3bn / 7.87bn. Geographically, (i) India business grew 6% YoY with growth in new fungicides and successful farmer reception of 3 new launches, (ii) LATAM business grew 7% YoY driven by product launches throughout the value chain , (iii) Europe grew at 7%YoY(against the industry negative growth rate of 2%) driven by sugar beet herbicide portfolio (iv) ROW grew at 5% YoY driven by double digit growth in Africa and key South East Asian countries, and (v) North...

UPLL's revenue grew 6.5% YoY to INR56.9b (est. of INR58.9b). EBITDA margin expanded 30bp YoY to 21.4% (est. of 21.8%), led by gross margin expansion of 90bp YoY to 49%. EBITDA grew 8.2% YoY to INR12,180m (est. of INR12,854m). Adj. PAT fell 9.5% YoY to INR7,650m (est. of INR7,145m) in 4QFY18 due to a significant increase in the tax rate to 17.7% from 7.1% in 4QFY17. For FY18, revenue grew 6.5% YoY to INR173.8b. EBITDA margin expanded 40bp YoY to 20.2% in FY18, led by gross margin expansion of 120bp. Adj. PAT, thus, rose 8% YoY to INR21b.

A multitude of products going off-patent would unleash a generics opportunity of~USD3b over CY17-20. With strong R&D and integrated manufacturing facilities,UPL is in a sweet spot to grab the impending opportunity in the generics market. The company is also set to benefit from the increasing phenomenon of pest resistance across crops with its broad array of products, which enables it to launch new combinations to tackle resistance. Pest resistance to major agro chemical 'glyphosate' (market size of ~USD5b) could provide UPL with its next key growth driver - its variant, 'gluphosinate'

Agrochemicals maker UPL Ltd. posted the slowest profit growth in five quarters but still managed to beat estimates. UPL has reported healthy 25.3 percent growth year-on-year in consolidated profit at Rs 579 crore for quarter ended December 2017 despite weak operational performance. The bottomline growth was driven by tax credit, lower finance cost and higher revenue. Consolidated revenue from operations grew by 7 percent to Rs 4,194 crore during December quarter compared to Rs 3,919 crore in year-ago....

Despite headwinds in key geographies, UPL posted healthy volume growth of 12% yoy, driven by steady performance in India and Europe. However, price decline of 2% yoy and adverse currency movement of 3% resulted in 7% yoy growth in net revenue to Rs41.9bn. Gross margin improved by 30bps yoy to 54.5% while EBITDA margin expanded by 50bps yoy to 19.8%. EBITDA grew by 9% yoy to Rs8.3bn, marginally lower than our estimate....

We maintain NEUTRAL with a TP of Rs 823/sh (16x Dec FY19E EPS). UPL reported a muted revenue growth of 7.0% YoY, at Rs 41.9bn in 3QFY18, largely driven by volume growth (+12%), was negated by the impact of currency movements (-3%), and a drop in realisations (-2%). EBITDA de-grew marginally by 1.4% YoY to Rs 7.16bn, EBITDM stood at 17.1% (-145 bps YoY). The drop was largely on account of higher other expenditures including exchange difference (as % of revenues 27.3% in 3QFY18, +245 bps YoY). However, lower interest cost (-39% YoY) and tax credits led APAT to deliver growth of 25.1% YoY to Rs 5.7bn.