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United Phosphorus 3QFY2012 performance highlights and results update

Contributed by Angel Broking

For 3QFY2012, United Phosphorus’s (UPL) revenue grew by 57.4% yoy to Rs.1,872cr and net PAT grew by 36.6% to Rs.113cr. Management has increased its revenue guidance to 35-40% for FY2012 and also reaffirmed its OPM guidance at 19-20%. The stock is quoting at attractive valuations of 8.5x FY2013E EPS and hence, we maintain our Buy rating on the stock.

Strong revenue growth: UPL reported strong revenue growth of 57.4% yoy to Rs.1,872cr during 3QFY2012. Robust growth was supported by a 90% yoy increase in international business and 62% growth in the US. UPL’s another key market EU, witnessed a 31% growth in sales, while India posted robust growth of 15%. Volumes continued to be strong, moving up by 31% in 3QFY2012.

Outlook and valuation: We expect UPL to post a CAGR of 16% and 14% in its sales and PAT over FY2011-13, respectively. At current valuations of 9.2x FY2013E EPS the stock is attractively valued. Hence, we maintain our Buy recommendation on the stock with a revised target price of Rs.182.