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MOSL: Morning India (13/March/19): 1. UPL (On a firm footing in North America); 2. Indraprastha Gas (Far away from the electric shock); 3. Delta Corp (Upholding dominance); 4. EcoScope (Headline CPI inflation a

MOrning India (13/March/19): 1. UPL (On a firm footing in North America); 2. Indraprastha Gas (Far away from the electric shock); 3. Delta Corp (Upholding dominance); 4. EcoScope (Headline CPI inflation at four-month high)

 

Today’s top research idea

UPL: On a firm footing in North America; Changing crop mix and favorable positioning to augur well

• UPLL has established itself as a strong player in the North American market, especially with the introduction of glufosinate-based products, which have been posting higher growth. The upcoming season in this respect holds importance as 23-25% of UPLL’s revenue in 4Q is contributed by North America.
• The acreage in the US is likely to shift towards maize/cotton from soybean owing to high closing stock of soybean. This should augur well given higher contribution of maize in total agchem market in North America v/s that of soybean despite similar acreage.
• Further, the company’s growth prospects have been enhanced post Arysta amalgamation, as it does not just strengthen UPLL’s position in Europe (~21% of global agrochemical market), but also plugs loopholes in UPLL’s portfolio globally (for e.g – wheat in Europe and North America).

Piping hot news

IIP growth slows to 1.7%, retail inflation rises to 2.57%

• Industrial activity slowed in January 2019 growing by just 1.7% due in large part to a deceleration in the manufacturing, electricity, and capital goods sectors, official data released on Tuesday showed. In a separate release, government data showed that retail inflation in February snapped a four-month declining trend by rising to 2.57%.