Buy UPL; target of Rs 745: Prabhudas Lilladher
Prabhudas Lilladher’s research report on UPL
UPL’s FY19 annual report highlighted a) potential opportunities in Arysta Lifescience, b) its initiatives towards manufacturing key molecules and achieving self-sufficiency, c) immense growth prospects for glufosinate and its swelling product portfolio backed by strong R&D. Acquisition of Arysta Lifescience helped UPL establish as a global leader in crop protection products. The strength of UPL lies in manufacturing, proprietary off-patent & specialty products, deep marketing reach and R&D capabilities. UPL is working on building competences for expanding digital services and processes by investing in artificial intelligence tools to analyse customer needs, using robotic sensors to access real-time on-field farmer data etc. Continued focus on resistance management, cost leadership along with proprietary/generic products, diversified presence across all crops & geographies helped UPL to outperform industry growth as well as mitigate the impact of volatility arising out of trade wars and natural calamities.
Maintain Buy with revise target price of Rs745 based on 8.5x FY21E EV/EBITDA (Previous – Rs752).
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