Add UPL, target price Rs 860: ICICI Securities

ICICI Securities has add call on UPL with a target price of Rs 860. The current market price of UPL is Rs 738.6.
Time period given by analyst is one year when UPL Ltd. price can reach defined target.

UPL Ltd., incorporated in the year 1985, is a Large Cap company (having a market cap of Rs 55372.33 Crore) operating in Pesticides/Agro Chemicals sector.


UPL Ltd. key Products/Revenue Segments include Agrochemicals, Export Incentives, Sale of services, Other Operating Revenue, Royalty Income for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 10894.00 Crore, down -31.81 % from last quarter Total Income of Rs 15977.00 Crore and up 27.22 % from last year same quarter Total Income of Rs 8563.00 Crore. Company reported net profit after tax of Rs 975.00 Crore in latest quarter.

Investment Rationale
The brokerage models UPL to report revenue and PAT CAGR of 12.7% and 22.7%, respectively, over FY22-FY24E, and RoE to move to 19.6% in FY24 from 19.8% in FY22. It remains confident of value creation with RoIC > cost of equity. It maintains ADD rating on the stock with a DCF-based target price of Rs860 (implied P/E 10x of FY24E EPS).

Promoter/FII Holdings
Promoters held 28.96 per cent stake in the company as of 30-Jun-2022, while FIIs owned 36.45 per cent, DIIs 16.46 per cent.