The share price of UPL rallied over 7 percent to hit a 52-week high of Rs 744 apiece in early trade on Friday after the company reported better-than-estimated earnings for the fourth quarter of fiscal 2021.
The agrochemical company reported a consolidated profit at Rs 1,361 crore in Q4FY21, registering a 74 percent growth against Rs 784 crore in the year-ago quarter.
The company’s consolidated revenue from operations during the quarter rose 14.8 percent to Rs 12,796 crore from 11,141 crore, YoY, with volume growth at 18 percent and price increase of 1 percent.
UPL’s earnings were ahead of CNBC-TV18’s analysts' poll that pegged profit at Rs 986 crore on revenue of Rs 12,167 crore.
On the operating front, EBITDA during the quarter increased 31 percent YoY to Rs 2,839 crore, while EBITDA margin expanded by 270 bps YoY to 22.2 percent.
In FY21, UPL achieved its guidance for revenue growth of 6-8 percent and surpassed EBITDA guidance of 10-12 percent growth.
Global brokerage CLSA reiterated a Buy rating on the stock and increased the target price to Rs 900 per share from Rs 740 earlier. It also raised FY22-23 EPS estimates by 4-5 percent.
“Strong India, EU and Latin America performance was offset by weak rest-of-world/North America sales. UPL beat FY21 revenue/Ebitda growth guidance but missed debt-reduction guidance by Rs 7 billion,” CLSA said.
JPMorgan believes that UPL’s positive earnings momentum is likely to continue, while net debt reduction needs to accelerate.
UPL is well-positioned to gain in current environment and strong crop prices will continue to drive net debt reduction, JPMorgan said.
It maintained an Overweight call with a target price of Rs 760 per share.
Domestic brokerage house Kotak Institutional Equities maintained Sell rating, but raised the target price to Rs 650 per share. "Q4 earnings were above estimate, led by higher revenue growth and gross margin," it said.
Kotak Institutional Equities raised FY22/23 EBITDA estimates by 10%/15%.
First Published: IST