United Phosphorus Ltd - Results in line, profitability on track - Emkay

Reco: ACCUMULATE
CMP: Rs 144
Target Price: Rs 172

- UPL's Q1FY14 sales growth of 11%yoy was lower than est however driven by EBIDTA margin expansion of 100bps to 18.6%, APAT Rs 2.6bn was in line with est

- Delay in season in North America affected topline growth (-23% yoy) however India (+24%) and RoW (+42%) markets reported strong topline growth

- Stability in new markets like Brazil and focus of high margin products have helped EBIDTA margin expansion which is likely to continue going forward

- Maintaining our FY14/15 est we reiterate our Accumulate rating on the stock. Higher debt along with rising cash level has been our biggest concern in the company

Source : Equity Bulls

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