UPL Limited and Lupine Limited two stocks would have made you a millionaire now if you had invested in any stock 20 years back. Shares of UPL Ltd. has jumped from Rs. 1.20 on 5 July 2002 742.50 as on 5th August 2022 at 3:30 PM IST, representing a multibagger return of 61,775.00 per cent over the last 20 years. The shares of Lupine Ltd. have risen from 2.33 on Jan 8, 1999 to their current level. 669.40 on 5th August 2022, 3:30 PM IST, resulting in a staggering multibagger return of 28,629.61 per cent over the last 23 years. These share prices show how investing in the long term can lead to multibagger profits.
UPL Limited
Broking firm Geojit has said in a note that “UPL has registered an impressive revenue growth of 27.1% Y-o-Y basis. 10,821 crore in Q1FY23, supported by solid volume growth, forex gains and better price realization. Geographically, sales from North America grew 47.1% year over year to Rs. 1,796 crore, driven by a substantial increase in herbicide backed by higher volume and pricing levels. Northern Europe sales up 13.5% y-o-y at Rs. 1,728 million, partially offset by the devaluation of the euro, product embargoes and the supply-chain impact of the Russia-Ukraine conflict. A strong 38.2% YoY sales growth at Rs. 3,464 crore in LATAM was driven by higher herb prices and double-digit growth in the NPP BioSolutions brand. Business in India showed a moderate growth of 8% annually due to the timing of plantation being affected. Despite the impact of the Chinese lockdown, JPY devaluation and supply issues, ROW achieved a year-on-year growth of 30.7%. EBITDA grew by 25.8% YoY to Rs. 2,343 crore in Q1FY23 as compared to Rs. 1,863 crore in Q1FY22, on account of efficient supply-chain management and better realizations in the herbicide portfolio. The EBITDA margin declined marginally by 23bps on a year-on-year basis due to higher SG&A expenses. Adjusted profit after tax grew 29.1% YoY to Rs. 955 crores.”
“With product innovation through partnerships and guidance for increased sales volume, higher realizations, revenue and EBITDA, the company is expected to post strong growth in the coming quarters. We expect PAT to register a CAGR of 21.1% in FY22-24E. Hence, we reiterate our BUY rating on the stock with a revised target price of Rs. 880 based on 12x FY24E adjusted EPS,” said research analysts at Geojit.
Brokerage firm Sharekhan, on the other hand, has said, “The target of increasing revenue share from industry-leading growth and differentiated and sustainable solutions will improve margin/earnings profile and promote sustainable growth and valuation re-rating.” The reward looks favourable, given its attractive valuation of 11.8x/9.8x its FY2023E/FY2024E EPS, given the strong growth outlook (we expect PAT CAGR of 23% and RoE of ~21%) on FY22-24E Hence, we maintain a Buy rating on UPL with an unchanged price target (PT) of Rs. 930.”
Brokerage firm Prabhudas Lilladher has said that “With better realizations citing positive demand scenario across the globe, UPL has revised its revenue and EBITDA growth guidance to 12-15% and 15-18% in FY23E (earlier 10%). and 12-15% YoY), with growth focusing on differentiated solutions and new product launches.Whereas, the company expects to reduce debt by USD400mn in FY23E. We broadly beat our FY23/24 estimates. We expect UPL to witness a Revenue/PAT CAGR of 11%/20% during FY 2012-24E. Maintain ‘Buy’ with Revised TP of INR1020 (earlier Rs 1010) based on 14xFY24E EPS Keep it.”
Over the last 20 years, the shares of UPL Limited have given a return of 61,775.00 per cent, which means an investment of Rs. 1 lakh is now priced at Rs. 6.18 Crore The most recent closing price of the stock is Rs. 742.50, and YTD, it’s down 2.84 percent so far in 2022.
Lupine Limited
Taking into account Lupin’s Q1FY23 results, brokerage firm Sharekhan in a note said that “Lupin Limited (Lupin) reported weak performance for Q1FY2023. Operating Profit Margin (OPM) surprised negative, US OPM declined by 1552 bps year-on-year as a result of overall cost escalation as well as a confluence of factors such as pricing pressure and treatment costs at its plants. As a result, the company reported a net loss of Rs. .505 crore profit in Q1FY2022 as compared to Rs.89 crore for Q1. Results missed estimates. Going forward, management shares a strong growth outlook across its US and India businesses, where cost control measures and products While efforts to transition the portfolio from generic to complex generic will drive growth in the US business, India’s sales are also expected to remain in a double-digit growth phase for the remaining three quarters, apart from cost-control measures in the US and some higher -Price Looking at the launch, Lupine has to be financed The exit is expected to exit with 18% OPM in 2023 as compared to 6.2% in Q1FY2023, which indicates a marked improvement.
“Lupin is in the midst of a cost-control program, in which it is focusing on reducing costs through addressing system inefficiencies and restructuring the cost structure. It also includes shelf stock adjustments and merchandise inventory rationalization. Combined with the completion of FY23, the US business can improve performance significantly from Q2FY23 and the management is quite confident of a strong bounce.Also, Lupine is expected to double the India business in the subsequent three quarters of FY2023. Looks to rise in the digits, supported by a correction in older medical products. On CMP, the stock trades at 28.9/17.8x its FY2023E/FY2024E EPS, which is also at a discount to its peers. Based on the outlook, we retain our buy recommendation on the stock with an unchanged price target (PT) of Rs 780,” said research analysts at broking company Sharekhan.
an investment of 1 lakh held in the shares of Lupine Limited 23 years ago would have increased now 2.87 crores due to multibagger returns of 28,629.61 per cent in the last 23 years. Share closed on Friday 669.40 each, and on a YTD basis, the stock has dropped 29.18% so far in 2022.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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