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Shares of UPL Ltd rose as much as 1.9 per cent to Rs 697.90, and were on track to end a 4-session losing run. Deutsche Bank believes recent concerns on UPL from weak Brazilian real vs the US dollar (12 per cent depreciation this quarter) are overdone.
The brokerage's forex tracker shows nearly 2 per cent y-o-y positive exchange impact on revenue for UPL this quarter. DB maintains “buy” rating and a price target at Rs 890. It says the stock is a preferred pick in Indian agri-inputs sector.
UPL forecasts constant currency revenue growth of 10-12 per cent for FY 2019; the brokerage expects the company to meet upper end of guidance. DB expects weak Brazilian real to improve farmer profitability in Brazil driving higher soyabean acreages this year. Latin America is the company's biggest market and contributed to 33 per cent of its total revenue in FY2018.
More than 465,000 shares traded vs 30-day moving average of 1.1 million. About 25 of the 28 analysts covering the stock have a “buy” or higher rating, 2 have “hold” while 1 has “sell”; their median price target is Rs 940, according to Thomson Reuters data.
Up to Thursday's close, the stock had fallen 10.2 per cent YTD.
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