Better realisations from recent acquisitions and currency volatility helped United Phosphorus (UPL) post a strong result for the December 2011 quarter, when most of its peers stumbled. The company is well geared to meet its revenue guidance for FY12. UPL’s December quarter net profits grew 34.5% against the year-ago period to . 112 crore. This was made possible due to the UPL’s overseas exposure. UPL’s consolidated topline grew 57% YoY to . 1,872 crore due to a substantial growth outside India. North America and Europe grew 62% and 31%, respectively, while the rest of the world segment grew over 90% driven by . 300-crore contribution from Brazilian acquisitions of DVA Agro and RiceCo and contributes nearly half of its overall revenues. The domestic business, however, was sluggish wirh a revenue growth of 15% due to unfavourable weather conditions.
Still, the robust overseas growth and acquisitions driving the revenues of the first nine months 40.9% means that it will easily meet its 30-35% revenue growth guidance for FY12.
However, volatility in the raw material prices continues to be a concern for the agrochem major. During the quarter, UPL’s operating profit margin remained flat at 18.6% against the year-ago period due to high input costs, which rose 720 bps to 55% in relation with the net sales.
High input costs, a higher tax outgo and . 12- crore loss in its Brazilian JV Sipcam, maintained pressure on UPL’s bottomline. Net profit grew only 34% YoY to . 112 crore. At . 147, the stock trades at 11 times its earnings for the trailing twelve months, which is lower compared with rivals such as Rallis India and Bayer Crop-Science that trade at P/E above 20 levels.
Still, the robust overseas growth and acquisitions driving the revenues of the first nine months 40.9% means that it will easily meet its 30-35% revenue growth guidance for FY12.
However, volatility in the raw material prices continues to be a concern for the agrochem major. During the quarter, UPL’s operating profit margin remained flat at 18.6% against the year-ago period due to high input costs, which rose 720 bps to 55% in relation with the net sales.
High input costs, a higher tax outgo and . 12- crore loss in its Brazilian JV Sipcam, maintained pressure on UPL’s bottomline. Net profit grew only 34% YoY to . 112 crore. At . 147, the stock trades at 11 times its earnings for the trailing twelve months, which is lower compared with rivals such as Rallis India and Bayer Crop-Science that trade at P/E above 20 levels.
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