Chola Securities

UPL (Buy)

Target: ₹940

CMP: ₹739.65

UPL, the frontrunner of the thriving Indian crop protection industry, is taking rapid strides to clinch a greater pie of the global crop protection business. UPL is banking on its core competencies — complete all-round product solutions across crop cycles for varied crops, cost effective manufacturing, strong distribution network, a world-wide presence and the ability to penetrate target markets by navigating complex registrations.

Furthermore, the company has leaped ahead of its immediate global competitors following the acquisition of Arysta which seems highly value-accretive. We believe the synergies are yet to fully reflect in financials but transcend it into an upper league as it becomes the 5th largest player in the world.

UPL’s pre-eminence by virtue of 40+ acquisition over last 25 years persuade us that it will continue to strengthen its franchise via inorganic way & thus, making it to top-3 players across the globe in future.

In our view, expertise in generic crop protection, market leading position and significant presence across branded generics (85 per cent of topline) will auger well for UPL in riding the growth in the domestic crop protection industry. We expect UPL to enhance its dominance domestically and concurrently narrow down the gap with its global competitors.

Related Topics