United Phosphorus - 1QFY2013 Result Update - Angel Broking

For 1QFY2013, United Phosphorus's (UPL) revenue grew by 19.7% yoy to Rs.2,180cr and Adj. Net Pat grew by 19.8% to Rs.221cr. Management has maintained positive revenue guidance of 15% for FY2013 and OPM guidance at 18-20%. In spite of factoring in a conservative numbers, the stock is quoting at attractive valuations of 7.3x FY2014E EPS and hence, we maintain our Buy rating on the stock.

Strong revenue growth: United Phosphorus Limited (UPL) reported consol revenues of Rs.2,180cr, registering a growth of 19.7% yoy. Volumes contributed 4% to growth while price increased by 5% with the balance 11% being contributed by favorable impact of exchange. On the operating front, company reported an EBITDA Margin of 16.2%, V/s 16.7% during the last corresponding period. However, on account of 76.6% yoy rise in interest expenditure, the net profits came in at Rs203cr, registering a growth of 10.1%. However, adjusted for the MTM, the Adj. net profit of Rs.221cr, a growth of 19.8%yoy.

Outlook and valuation: We expect UPL to post a CAGR of 10.0% and 18.4% in its sales and PAT over FY2012-14, respectively. At current valuations of 6.5x FY2014E EPS the stock is attractively valued. Hence, we maintain our Buy recommendation on the stock with a revised target price of Rs.170.

Source : Equity Bulls

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