United Phosphorus - 4QFY2013 Result Update - Angel Broking

For 4QFY2013, United Phosphorus (UPL)' revenue grew by 30.8% yoy to Rs. 2,773cr and Adj. net PAT grew by 42.9% to Rs. 292cr. For FY2014, the Management has maintained its guidance of a revenue growth of 12-15% and of OPM (incl. other income) expanding by 100bp. However, even after factoring in the conservative numbers, the stock is quoting at an attractive valuation of 6.0x FY2015E EPS and hence, we maintain our Buy rating on the stock.

Robust growth: The company has reported a top-line growth of 30.8% yoy for the quarter to Rs. 2,773cr. The top-line growth was driven by both exports and domestic business, which grew by 25.0% and 33.0% respectively. The exports growth came on the back of North America and Europe, which grew by 49% and 37% respectively. The top-line growth was driven by a 16% volume growth, while the price rise was of around 4%. The exchange impact on sales growth was of around 12%. On the operating front, the company reported an EBITDA margin expansion of 91bp to 17.6% (16.7% in 4QFY2012). This aided the net profit to grow by 37.9% yoy to end the period at Rs. 278cr, on back of top-line growth.

Outlook and valuation: We expect UPL to post a CAGR of 12.0% and 14.2% in its sales and PAT respectively, over FY2013-15. At the current valuation of 6.0x FY2015E EPS, the stock is attractively valued. Hence, we maintain our Buy recommendation on the stock with a revised target price of Rs. 232.

Source : Equity Bulls

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