KR Choksey has given Buy recommendation for UPL with a target price of Rs. 901 in its research report issued on Feb 04, 2022
KR Choksey’s research report on UPL
In Q3FY22, UPL’s consolidated revenue grew by 23.8% YoY/6.9% QoQ to INR 1,12,970 mn. The growth was due to better realizations and a healthy uptick in volumes. The growth was across geographies- LatAm (22%), N America (57%), Europe (26%), India (0%) and RoW (15%). EBITDA has seen a growth of 7.5% YoY/21.6% QoQ to INR 24,190 mn, while EBITDA margin contracted by 324 bps YoY and expanded by 259 bps QoQ to 21.4% in Q3FY22. Adj. PAT has seen growth of 26.2% YoY/ 29.4% QoQ to INR 9,640 mn, The PAT margin expanded by 16 bps YoY and by 148 bps QoQ to 8.5% in Q3FY22. The company maintained its target to achieve net debt/EBITDA of over 2x by March 2022 and have already prepaid INR 9,400 mn in January 2022.
Based on strong quarter results and given the management focus to improve earnings/margin profile, we have revised EPS of 81.9/shares (previously 80.6/shares) and applying a P/E multiple of 11.0x, implying a target price of INR 901 per share (previous TP INR 886 per share), yielding an upside potential of 16.4%. Hence, we retain our rating to ‘BUY’.
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At 17:30 UPL was quoting at Rs 767.00, down Rs 6.95, or 0.90 percent.
It has touched an intraday high of Rs 776.60 and an intraday low of Rs 765.00.
It was trading with volumes of 48,052 shares, compared to its thirty day average of 96,543 shares, a decrease of -50.23 percent.
In the previous trading session, the share closed down 1.48 percent or Rs 11.65 at Rs 773.95.
The share touched its 52-week high Rs 864.75 and 52-week low Rs 514.10 on 08 June, 2021 and 23 February, 2021, respectively.
Currently, it is trading 11.3 percent below its 52-week high and 49.19 percent above its 52-week low.
Market capitalisation stands at Rs 58,602.29 crore.