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United Phosphorus

Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=1445
Printed Date: 21/Apr/2025 at 12:26pm


Topic: United Phosphorus
Posted By: BGKGURU
Subject: United Phosphorus
Date Posted: 11/Dec/2007 at 1:49pm

Statistical Abstract

Year to Net Profit Diluted EPS EPS growth P/E P/B ROE Yield

31 Mar (RsM) (Rs) (%) (x) (x) (%) (%)

2006A 2,163 11.34 20.4 30.3 5.1 21.0 0.3

2007A 2,897 14.41 27.1 23.9 4.6 20.9 0.3

2008E 3,877 19.28 33.8 17.9 3.9 23.8 0.4

2009E 5,775 28.72 49.0 12.0 3.0 28.3 0.4

2010E 7,145 35.53 23.7 9.7 2.3 26.9 0.4

United Phosphorus (UNPO.BO)

Buy: Management Meeting Reinforces Confidence

ƒæ Maintain Buy (1L) — as our meeting with management reinforces our

confidence in UPL’s growth prospects. The restructuring of Cerexagri is on

track with material upside in financials to come from 4Q08. The high valuation

at which the less efficient Arysta was acquired recently also underpins the

attractiveness of the crop chemicals space in general, and UPL in particular.

ƒæ Reiterates guidance — UPL reiterated its guidance of 15-20% top-line growth

(organic) and FY09E EBIDTA margins of 22-23%, which is very creditable in

our view given the pressures from rising crude prices and rupee appreciation.

We forecast 54% CAGR in net profit over FY08-10E.

ƒæ Cerexagri update — UPL indicated that it was on course to complete the

restructuring and integration of Cerexagri’s French operations by the end of

FY08. Besides, it intends to start this process in Spain in the next quarter. With

the restructuring of US operations already complete, we expect material upside

to reflect in financials from 4QFY08 and act as a key catalyst for the stock.

ƒæ Upbeat on Advanta — UPL remains upbeat on its seeds business, Advanta

(49% holding), due to low penetration of hybrid seeds in India and better buying

ability of farmers on back of the recent buoyancy in food prices. Its healthy

sunflower oil (Nutrisun) project is also on course for launch in late CY09.

ƒæ Nufarm in play once again? — Nufarm has announced that the US$2.6bn

conditional takeover proposal by ChemChina has fallen through. We believe

this could bring Nufarm back into play as a potential target. In such a scenario,

UPL could be one of the main bidders, especially given that it is well placed on

the balance sheet front following its recent US$475m fund raising.

 

source citireport 

 


Replies:
Posted By: basant
Date Posted: 11/Dec/2007 at 2:02pm
Please do not copy the entire article but only a brief synopsis.to protect privacy norms.

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Posted By: excel_monkey
Date Posted: 25/Jan/2011 at 1:21am
united phosphorus is quoting at a P/E of 10 with decent growth and ROE
the company also owns some intellectual property in form of registrations and patents

Posted By: rajnsharma
Date Posted: 25/Jan/2011 at 1:33am
Originally posted by excel_monkey

united phosphorus is quoting at a P/E of 10

Something wrong with your data. Please recheck. PE is 35+ and EPS is around 4.5


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Wall Street makes money by it's activity, while you can make money by your in-activity - Warren Buffett

Posted By: excel_monkey
Date Posted: 25/Jan/2011 at 1:49am
from a broker report
http://breport.myiris.com/INFOLINE/SEACHEIN_20101104.pdf

To benefit from rise in prices of soft commodities
Since July, soft commodity prices have rallied significantly with wheat prices up 36%, corn up 51% and palm oil up 33%. Further, weather patterns in Latin and North America have improved and have became conducive for additional sowing. We believe the rally in soft commodities supported by favorable weather conditions will translate into higher farm incomes. This would improve demand for agri-inputs in developed markets. Since United Phosphorous (UPL)derives ~65% of its revenues from exports, H2 FY11 is likely to witness a robust 22% rise in revenues.

FY11 guidance intact despite subdued Q2; Good growth in H2 Q2 revenues grew 9.6% yoy primarily on back of robust domestic sales (up 45% yoy). Despite a healthy 13% volume growth, adverse currency movements and 2% decline in export revenues led to a subdued topline. Lower raw material costs aided a 150bps margin expansion. Despite a subdued topline, management retained its FY11 guidance of 10-15% growth in consolidated sales coupled with ~200bps improvement in OPM

Inorganic growth possibilities with surplus cash, low leverage As of Sep’ 10, UPL had an estimated cash to the tune of ~Rs20bn (22% of Mcap, Rs45/share) which leaves enough room for greenfield expansion as well as acquisitions. Over the past decade, it has acquired 17 companies, transforming itself in to the 12th largest
agrochemical and 3rd largest generic agrochemical player globally.
Recently, the company has acquired non-mixture Mancozeb
(Manzate brand) from DuPont to strengthen its Mancozeb business in North and South America. A lean balance sheet with FY10 gross D/E at 0.3x also lends support for inorganic initiatives.

Big opportunity; attractive valuations
We expect UPL to benefit from 1) Rise in soft commodity prices 2) Jump in domestic agri-demand (due to stellar monsoon season) and 3) Stability in raw-material prices. Further, products related to agriinputs, which generate ~US$4bn in annual sales, will go off-patent globally by 2014. This creates opportunity for generic players like
UPL given its strong distribution network, lean balance sheet and successful acquisitions track record. We value the stock at 13x FY12 EPS and recommend BUY with a target price of Rs238.

Posted By: excel_monkey
Date Posted: 25/Jan/2011 at 2:14am
on a consolidated basis its P/E for FY 2011 is projected at Rs. 16
Originally posted by rajnsharma


Originally posted by excel_monkey

united phosphorus is quoting at a P/E of 10
Something wrong with your data. Please recheck. PE is 35+ and EPS is around 4.5

Posted By: Electron
Date Posted: 26/Jan/2011 at 9:34pm
I work for this company and I can say with confidence that the management has high integrity and have a great vision for the company. Good long term story! The company has high focus on patents in India and worldwide. In fact, less people know that this company was awarded the first exclusive marketing right in India for one of their products. 

Posted By: excel_monkey
Date Posted: 26/Jan/2011 at 3:18am
how this company is different from other international pesticide companies?
Originally posted by Electron

I work for this company and I can say with confidence that the management has high integrity and have a great vision for the company. Good long term story! The company has high focus on patents in India and worldwide. In fact, less people know that this company was awarded the first exclusive marketing right in India for one of their products. 

Posted By: manishwithted
Date Posted: 26/Jan/2011 at 8:54am


hi excel,

on consolidated level , the company in the last 3 qtrs has delivered an EPS of abt 7 ( as per india info website) , to deliver an EPS of 16 - 7 = 9  , in 1 qtr looks unrealistic.

If Electron can pls specify what kind of growth in percentage terms company is expecting.  Good to know that the company has a good management.


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Long term thinking improves short term decision making - Brian Tracy

Posted By: Catalyst
Date Posted: 27/Jan/2011 at 12:14pm
Well, not really such a good management, if you notice the stock price fell dramatically during the middle of decemeber and the reason was that the company has already indicated selectively to some analysts and investors about their disappointing results coming ahead.
 
You can see many reports came during that time wherein the analysts had downgraded their earnings estimates and now the same analysts are coming out with the reports saying the results are in-line with their estimates!
 
That is because they already knew what was coming otherwise for a company whose majority of revenues (75-80%) comes from outside India spread across many countires, how come they estimated such dismal performance so accurately! So much so for fundamental analysis and corporate governance.
 
So the big investors already sold their stuff and hence even after such results the stock has not reacted too negatively.
 
This is why people say the stock market discounts things already, look at the stock chart and you'll know.
 


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What’s Euphoria, think of it as obscenity. Though its probably impossible to formulate a test for Obscenity but you know when you see it.

Posted By: Electron
Date Posted: 30/Jan/2011 at 2:33am
This company makes branded generic agrochemicals. The international companies are into new agrochemicals. Its like comparison between Pfizer and Teva/Sandoz/Matrix, to borrow the concept from pharma space. 

Posted By: shontou
Date Posted: 24/Oct/2011 at 5:22pm
Conference Call      
          United Phosphorous
Expects revenue growth of 30-35% in FY'12


United phosphorus conducted a conference call to discuss the results for the quarter ended September 2011 and way forward.

Highlights of the Concall
For the quarter, consolidate revenues are up by 41% to Rs 1721.05 crore while net profit of the company was down 50% to Rs 56.95 crore. Net profit of the company was impacted due to net exchange loss of Rs 111.35 crore (corresponding previous year quarter loss was Rs 16.54 lakh) and an EO expenditure of Rs 14.35 crore (nil in Q2FY'11)
Revenues from the domestic market grew 25%, North American revenues up by 12%, Europe just 3% and the rest of world grew about 105% (mainly due to DVA Agro Brazil acquisition July 2011) in Q2FY'12 on a y-o-y basis.
The company expects revenue growth in the range of 30% to 35% in FY'12.
The Company also expects to maintain the EBITA margin between 19-20% for FY'12 which it has lowered from earlier guidance due to rise in raw material costs.
The company plans to repay almost 25-30% of its gross debt in 2HFY'12. Around 3/4th of the company's debt is in forex currency. Interest rate has been about 7.5% which is of floating rate.
Domestic market has been good in terms of monsoon. Drop in commodity prices helped the farmers.
Forex Loss: Inventories will get liquidated and converted into receivables, so that it will be re-priced.
DVD Agro and RiceCo acquisition contributed revenues approximately of Rs 240 crore in Q2FY'12.
European business has done well on YoY basis. Further the company expects European business to be subdued due to the slowdown in that geographical location. However business in India and Latin America would be robust.

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Every day, self-proclaimed stock market "experts" tell us why the market just went up or down, as if they really knew. So where were they yesterday?

Posted By: vijaybarvadiya
Date Posted: 24/Oct/2011 at 10:20pm
tell me about future trend of provogue india share prize....

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