Sharekhan has given Buy recommendation for UPL with a target price of Rs. 720 in its research report issued on Mar 19, 2021

Sharekhan’s research report on UPL

Management expects sustainable 8%-10% revenue growth p.a., given its focus to expand revenue share of differentiated & sustainable solutions (biosolutions – growing at 15%) and production innovation in off-patented business. UPL’s recent strategic collaboration with FMC for Rynaxypyr has the potential to add $200 million (4%-5% of FY2021E revenue); management targets to add more products for distribution to expand its product portfolio and drive revenue growth. On track to achieve net debt/EBITDA to 2x by March 21 (further reduced debt by $300 million in February 2020); management has also addressed investor concern on corporate governance (helps improve investor sentiments). UPL’s valuation of 11.4x its FY2023E EPS is attractive, given strong earnings outlook, improving margin/RoE profile at 22%/18% in FY23E, and focus to deleverage its balance sheet.


Hence, we retain Buy on UPL with a revised price target (PT) of Rs. 720.