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Citi puts a BUY on United Phosphorous

June 28, 2007

Citigroup has put a BUY on United Phosphorous Limited [UPL] with a target price of Rs 380. UPL’s acquisition of 2 brands from Dupont is another step to augment its product basket by inorganic means.

UPL is the only Indian play on the global crop protection market, with around 80% of
revenue coming from global markets. Citi forecast FY07-10E revenue and net profit CAGRs of 21% and 35%, respectively. Citi believes that P/E vs. earnings CAGR or EV/EBIDTA vs. EBIDTA CAGR is the correct metrics to value companies such as UPL.

Citi expects UPL to report an EPS of Rs 19.31 and 28.77 for for 2008 and 2009. Target price of Rs380 is based of average of FY08Eand FY09E FD EPS estimates.

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