United Phosphorus - 1QFY2017 Result Update - Angel Broking

For 1QFY2017, United Phosphorus (UPL) posted sales of Rs. 3,452cr V/s Rs. 3,205cr in 1QFY2016, ie a growth of 7.7% yoy. All markets posted double digit growth except for India and the USA, which posted growth of 1% and 5% respectively. Growth was on the back of 8% volume growth, while price dip contributed 2%, and exchange rate accounted for 2%. On the operating front, the OPM came in at 18.6% V/s 16.7% in 1QFY2016. This led to an Adj. net profit of Rs. 430cr V/s Rs. 340cr in 1QFY2016, ie a growth of 26.4% yoy. The Management maintains its guidance of 12-15% revenue growth and 60-100bp margin expansion. We maintain our Buy rating on the stock.

Quarterly highlights: For 1QFY2017, the company posted sales of Rs. 3,452cr V/s Rs. 3,205cr in 1QFY2016, ie a growth of 7.7% yoy. All markets posted double digit growth except for India and the USA, which posted growth of 1% and 5% respectively. Growth was on the back of 8% volume growth, while price dip contributed 2%, and exchange rate accounted for 2% gain. On the operating front, the OPM came in at 18.6% V/s 16.7% in 1QFY2016. The improvement in the OPM was on back of higher gross margins, which came in at 53.6% V/s 52.0% in 1QFY2016. This led the company to post a net-profit of Rs. 430cr V/s Rs. 340cr in 1QFY2016, a growth of 26.4% yoy.

Outlook and valuation: We expect UPL to post a CAGR of 16.0% and 18.9% in sales and PAT, respectively, over FY2016-18E. The Management has given its guidance of 12-15% volume growth with 60-100bp margin expansion in FY2017. We recommend a Buy rating on the stock.

Shares of UPL Limited was last trading in BSE at Rs.612.85 as compared to the previous close of Rs. 601.85. The total number of shares traded during the day was 137272 in over 4455 trades.

The stock hit an intraday high of Rs. 615.95 and intraday low of 603.55. The net turnover during the day was Rs. 83983990.

Source : Equity Bulls

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