Given the sturdy agri-input demand, the organization has been expanding its herbicides capacity.
In a current short article published by a top newspaper, a whistle blower has produced critical allegations of third-celebration transactions against promoters of UPL. As per the short article, the whistle blower has alleged that the organization has entered into rent bargains with shell providers owned by its personnel and has paid hefty rents for the properties. We think recurring corporate governance concerns have marred UPL’s sturdy fundamentals and kept valuations beneath stress (trading at 6.5x FY22E EV/EBITDA). In our view, addressing these concerns will be important for the stock’s re-rating. Given sturdy enterprise fundamentals and strong international franchise in agrochemical space, keep ‘BUY’ with Rs 615 TP.
In a current short article published by a top newspaper, a whistle blower has produced critical allegations of third-celebration transactions against promoters of UPL. As per the short article, the whistle blower has alleged that the organization has entered into rent bargains with shell providers owned by its personnel and has paid hefty rents for the properties, which had been earlier held by promoters. Management, in the course of the conference contact, quashed these allegations, citing no involvement of either the promoters or the company’s personnel with reference to the entities talked about. Also, the organization has refuted the claim produced by the short article and stated that none of the present or retired board members in the previous seven years have been involved in the stated allegations.
Management has highlighted sturdy progress of cropping season across international markets. Rise in commodity rates along with demand recovery across ATAM and South-East Asia is assisting UPL get industry share. Given the sturdy agri-input demand, the organization has been expanding its herbicides capacity. Advanta (contributes much less than 10% to general income mix) is anticipated to provide 20-30% YoY development in the course of FY21 led by sturdy demand for corn seeds globally. Management remains committed to decreasing gross debt by means of sturdy money flows.