Q4FY13: United Phosphorus Posts Sound Results

United Phosphorus (UPL), a global generic crop protection, chemicals and seeds company has posted a net profit of Rs 278.4 crore on a consolidated basis for the quarter ended March 31, 2013. This has increased from Rs 201.8 crore posted in the corresponding quarter in the previous year, showing a jump of 38%. 

One of the reasons for such a high increase in profit is a more than fivefold increase in other operating income to Rs 48.2 crore (it came out at Rs 7.5 crore for Q4FY12). Besides, there was a marginal fall in the cost of raw materials as percentage of sales from 52.5% (Q4FY12) to 51.4% (Q4FY13) that improved the profitability. These factors led to improvement in the EBIDTA margins by 100 basis points.

Nonetheless, net sales of the company have also increased by 33% on a yearly basis to Rs 2820.7 crore for Q4FY13. Segment wise, it is the agro activities that have boosted total sales by growing 66% on a yearly basis. For Q4FY13, this segment has posted sales of Rs 802.2 crore and made for 80% of the total sales. Other segment, non agro activities contributed to 20% of the total sales and grew by 35% in the same period and revenues worth Rs 194.1 crore were posted for the quarter. 

FY13 Result

The company also announced the consolidated results for FY13. The total income of the company has increased by 20% to Rs 9194.5 crore (it stood at Rs 7654.7 crore for FY12). The net profit has seen a jump of 39% to Rs 774.6 crore for FY13.

The company posted net earnings of Rs 17.12 per share for FY13 which discounts the current market price of its shares by 7.7 times. Looking at the growth rate of the company, one can take exposure to the counter at the current level. The UPL board has also recommended a dividend of Rs 2.5 per share that gives a dividend yield of approximately 2%.