MOSL: UPL (Buy)-A quarter of holistic growth-Cheers across geographies barring India
UPL: A quarter of holistic growth; Cheers across geographies barring India
(UPLL IN, Mkt Cap USD5.5b, CMP INR770, TP INR943, 22% Upside, Buy)
- Largely in-line result; operational performance improves: Revenue increased 17.3% YoY to INR49.2b (our estimate: INR47.7b) in 3QFY19, driven by volume growth of 6% YoY and price growth of 7% YoY. EBITDA increased 22.6% YoY to INR10,160m (our estimate: INR9,633m), with the margin expanding 90bp YoY to 20.6% (our estimate: 20.2%). Adj. PAT was flattish YoY at INR6,340m (our estimate: INR6,669m). For 9MFY19, revenue grew 14% YoY to INR133,120m, EBITDA increased 18% YoY (margin up 60bp YoY to 20.3%) and adj. PAT grew 6% YoY to INR15,510m.
- All-round growth barring India: 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). UPLL’s 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.
UPL is a global producer of crop protection products, intermediates, specialty chemicals and other industrial chemicals based in India. Co. offers a range of products that includes insecticides, Fungicides, Herbicides, Fumigants, PGR and Rodenticides. Co. manufactures and markets Caustic Chlorine, White Phosphorus, Industrial Chemicals, Specialty Chemicals and is engaged in Captive Power Generation of 48.5 MW. Co. maintains a range of generic agrochemical and other chemical intermediates which are exported to more than 100 countries in the world.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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