KR Choksey Assigns "Buy" On Agrochemicals Sector Stock For 46% Robust Returns

KR Choksey has a "Buy" on the stock of UPL Ltd with a target price of Rs 1,041/share. The stock with the given target price is likely to fetch a return of up to 46% if you purchase the stock today at the current market price. This is a large-cap stock that operates in the Agrochemicals sector having a market capitalisation of Rs 54,036.24 crore. Below are key highlights:

UPL Ltd Stock Outlook

The share price of UPL is currently trading at Rs 714.45/share, down 1.13% as compared to its previous close of Rs 722.65/share. The stock has given 3.02% in a week. It has fallen 6.89% in 1 year. In 3 years it gave 32.1% positive return. In 5 years it gave 51.93% positive return. Its 52 week high is Rs 848/share and 52 week low is Rs 607.50 apiece.

 

UPL Ltd

UPL is the largest producer of agrochemicals in India and is among the top five post-patented agrochemical manufacturers in the world. Over the years, UPL has outperformed the industry's growth rate. UPL is aiming to reduce its net debt by USD 500 mn in order to bring its Net Debt/EBITDA ratio below 1.4x by the end of FY23E and maintain its 'investment grade' credit rating. We believe improvement in market share, given its global scale and focus on high-growth products such as differentiated products, specialty chemicals, and seeds businesses, will drive its volume/revenue growth going forward. Moreover, the company's continuous investment in SG&A to strengthen its customer relationships and farmer connects, would help the company in the long run. New product launches in key geographies, especially in the developing markets such as India, Brazil and Mexico, will further provide impetus to revenue growth.

 

Brokerage Suggests buy for target price of Rs 1,041 apiece

According to the KR Choksey, At CMP of INR 712, UPL is trading at a P/E of 11.6x/8.9x to its FY23E/FY24E EPS of INR 61.6 and INR 80.1 respectively. "After factoring in strong Q3FY23 results, we are keeping our FY23E/FY24E estimates mostly unchanged. For valuing UPL, we continue to apply a target P/E multiple of 13x, implying a target price of INR 1,041 per share (unchanged), yielding an upside potential of 46.2% from the CMP. Accordingly, we retain our 'BUY 'rating on the shares of UPL," the brokerage has said.

Disclaimer

The stock has been picked from the brokerage report of KR Choksey. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.