Prabhudas Lilladher's research report on UPL
UPL reported 2QFY23 revenue/EBITDA/PAT of Rs125.0bn/Rs27.6bn/Rs8.5bn (+18%/+35%/+27% YoY). Results were ahead of our and consensus estimates. Key highlights are: (1) Volume and price growth of-7% and +21% YoY respt. Fx up +4% YoY; (2) LATAM/ Europe/ NAFTA/ RoW/ India posted +20%/+1%/+24%/+21%/+22% YoY growth in2QFY23; (3) NWC has increased by 10 days YoY to 124 days led by a) robust growth of 22% in sales, b) short-term inventory build-up due to strong demand and uncertainties in supply-chain; (4) Net debt stood at Rs314.9bn (including perpetual bond of Rs29.8bn) up Rs20.3bn QoQ and Rs42.3bn YoY; (5) Maintained Guidance for FY23E expect to achieve revenue growth of 12-15% and EBITDA growth of 15-18% earlier citing robust demand scenario globally. While Debt repayment guidance now stands at USD650mn for FY23 (largely led by recent restructuring of business verticals) vs earlier USD300-400mn.
Outlook
Citing positive demand scenario globally coupled with better realizations, UPL maintained its revenue and EBITDA growth guidance to 12-15% and 15-18% in FY23E, with growth to be largely driven by focus on differentiated solutions and new product launches. While, the company expects to reduce debt by USD650mn (earlier USD400mn) in FY23E led by recent restructuring of business verticals resulting into inflow of USD259mn. We broadly maintain our FY23/24 estimates. We expect UPL to clock Revenue/PAT CAGR of 11%/17% over FY22-25E. We introduce and roll forward our valuations to FY25E. Maintain ‘BUY’ with a revised TP of INR1070 (earlier Rs1020) based on 14xSeptember FY24E EPS.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.