UPL Ltd. share price target

Beating macro headwinds, UPL delivered an outstanding 4QFY16. Revenues were at Rs 43bn ( 20% YoY) owing to strong volume growth of 25%. EBITDA margin expanded to 22.6% led by lower RM costs, and consequently EBITDA was Rs 9.8bn ( 25%). Higher other income pushed up APAT to Rs 5.7bn ( 29%).

Revenue grew 20% YoY to ~INR43.4b (vs. our estimate of ~INR39.6b), with India revenue up ~4% YoY and international revenue up ~22% YoY. International revenue was driven by growth of 57% YoY in LatAm and ~12.6%...

For 3QFY2016, United Phosphorus (UPL) posted sales of Rs3,050cr, a yoy growth of 1.3%. Overall, growth was driven by price and volume growth of 3% and 11% respectively, while exchange had a weigh down effect by 13%, which impacted the sales. On the operating front, the OPM came in at 19.0% V/s 17.9% in 3QFY2015. This is in spite of lower sales as the GPM improved to 54.2% V/s 48.8% in 3QFY2015 on back of healthy volume growth and price rise. This aided the Adj. net profit to come in at Rs306cr V/s Rs264cr in 3QFY2015, a yoy growth of 15.9%. The Management has maintained its guidance of 12-13% volume growth with 100bps margin expansion in FY2016. We maintain our Buy recommendation on the stock with a price target of Rs480. Quarterly highlights: For the quarter, UPL posted sales of `3,050cr, a yoy growth of 1.3%. USA and Latin America posted a 12% and 14% yoy growth, respectively, during the quarter. Other key markets like India, Europe and ROW posted a dip of 17%, 9% and 8% yoy, respectively. Overall, growth was driven by price and volume growth of 3% and 11% respectively, while exchange had a weigh down effect...

UPL delivered decent results despite volatile currencies, muted agri-commodity prices and unfavourable weather across geographies. Revenues were at Rs 31bn ( 2% YoY) owing to negative forex impact of 13%. EBITDA margin expanded to 20.2% ( 132bps), led by lower RM cost. Higher other income further boosted APAT to Rs 3.0bn ( 16%).

Key highlights: 1/Volumeled earnings growth has become UPL's hallmark and it underscores the company's improving market share. We believe UPL's key launches (Iris, Eros,Ulala,LancergoldinIndia,Metribuzin,Satellite,LifelineintheUSandUnizebGoldin...

Merger rationale leveraging on each other's strength: The decision to merge Advanta would align UPL's business model to global peers (presence in entire agriinputs value chain from seedscrop chemicals to postharvest treatment). Besides, the combined entity would...

For 2QFY2016, United Phosphorous (UPL) posted a 4.2% yoy growth in sales to Rs2,729cr. The volume growth during the period was of 13% yoy, while price increases contributed around 2% yoy. The exchange rate on the other hand, impacted adversely by 11% yoy. On the operating front, the gross margins came in at 49.9% V/s 50.5% in 2QFY2015, which led the OPM to come in at 16.5% V/s 16.7% in 2QFY2015. The company posted a 12.3% yoy dip in its PAT for the quarter excluding the extra-ordinaries and profits from associates and subsidiaries. However, a higher share of profitability from associates and subsidiaries has enabled the company posted to post an Adj. PAT of Rs190cr V/s Rs180cr in 2QFY2015, a yoy growth of 5.5%. We maintain our Accumulate rating on the stock with a price target of Rs510. Quarterly highlights: For 2QFY2016, the company posted a 4.2% yoy growth in sales to Rs2,729cr. Its key markets - India and Latin America, posted a 5% and 8% yoy growth, respectively. ROW and USA posted a yoy growth of 12% and 10%, respectively. The only market to decline was Europe, which posted a 10% yoy dip in sales. The volume growth during...

UPL reported revenues at Rs 28bn ( 5% YoY), led by robust volume growth ( 13%), which offset forex impact. The companys performance has been stellar considering a volatile currency, muted agri-commodity prices and unfavourable weather. EBITDA margin expanded to 18.7% ( 63bps), led by lower opex. APAT was Rs 1.9bn ( 7%).

Revenue growth is expected to drop to 8.8% in FY16E (against our earlier expectation of 11.4%) with an expected recovery to 12.5% in FY17E (against our earlier expectation of 11.0%). The drop in growth rates in FY16E is expected to be led by drop in LATAM growth rates to 14.2% and negative growth of 2% in EU region. North America though is expected to grow at 8%. The growth rates in these regions are the most significant deviations from the levels expected in our initiating coverage. Expected growth rate deviations in these regions are: EU -900 bps, LATAM -580 bps and North America +300 bps. RoW and India are still expected to deliver the same growth levels. FY17E is expected to benefit from the base effect of FY16E especially so in LATAM followed by EU leading to a recovery in revenue growth in FY17E.

9 Despite adverse weather, volatile currency, and soft commodity markets, revenues/volumegrowthof5%/13%underscoreUPL'simprovingmarketshare 9 Gross margins intact, OPM improved 65bps to 18.7% mainly due to higher share of...