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United Phosphorus Q2 net halves, shares fallqrcode

Oct. 21, 2011

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Oct. 21, 2011

United Phosphorus Q2 net halves, shares fall

Higher interest costs and foreign exchange losses halved the September-quarter profit of United Phosphorus despite a substantial surge in sales.

Shares of the agrochemicals maker fell nearly 6 percent on the quarterly numbers.

The Mumbai-based company's consolidated net profit fell to 569.5 million rupees against 1.15 billion rupees over the same period last year.

The consolidated sales jumped 40.5 percent on-year to 17.21 billion rupees, it said.

The chemical maker's interest and finance cost, which includes the forex losses, nearly tripled to 1.92 billion rupees in the quarter, while it also reported one-time loss of 143.5 million rupees, it said.

"Other than the forex losses, results are exceptionally good. Sales have surged and EBITDA at 325 crore (3.25 billion rupees), is above expectations," Tarun Surana, analyst at Sunidhi Securities & Finance, told Reuters over the telephone.

The healthy growth trend is expected to continue for the company, Surana said, who has a 'buy' rating on the stock with a target price of 204 rupees for FY13.

"Forex loss is just a technical aspect and it would eventually get reversed later," another fertiliser analyst with a Mumbai-based brokerage said.

"With rising crop acreage and a better winter season ahead, the growth momentum looks good for the firm."

Area under summer-sown crops in India rose to 105.66 million hectares as on October 7, compared to 102.85 million hectares a year ago, data from the federal farm ministry showed.
Source: Reuters

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