United Phosphorus' awesome recent run continued today as it sprang a solid 13.8% to Rs 278.80 in early trades. It had even hit Rs 287.90 barely as trading commenced today.
Volumes too were considerable so far, at 7 lakh shares on BSE.
It is the news that United Phosphorus (UPL) has acquired US chemical giant Dow AgroScience's Oryzalin herbicide business that is sending the scrip shooting up of late. Interestingly, the rally was not an immediate manifestation since the development was announced as early as Saturday, 21 June 2003.
Volatility took hold of the counter on Monday and Tuesday, as it settled at Rs 176.55 compared to Friday's close of Rs 175.50. In the next two trading sessions, the scrip soared 38% cumulatively to Rs 245 on the back of heavy volumes.
United Phosphorus has entered into an agreement with Dow AgroScience LLC, USA, for purchase of rights, title, interest, associated goodwill, trade marks, contracts, inventories, registrations, etc of the Oryzalin herbicide business including Surflan herbicide and all Surflan based pre-mixes, throughout the world, except Switzerland and the European Union.
Under the agreement, the company and its subsidiaries throughout the world can start selling Surflan immediately, except in the countries mentioned above. This purchase will add to the product portfolio of the company and expand its market presence in the segment of citrus, fruit and nut trees and specialty crop markets, particularly in the US and Australia.
The consideration paid for the purchase of the business including inventories is U.S. $ 21.3 million.
UPL is a leading international producer of generic crop protection products, intermediates and other industrial chemicals. It is one of the largest agrochemical producers in India with a wide range of products that include fumigants, fungicides, insecticides, rodenticides and herbicides.
UPL has also been focussing on exports with product registrations abroad. The US and the UK are its major markets accounting for over 75% of exports. UPL, currently, has eight product registrations in the US and 30 across Europe. UPL is targeting 2-3 product registrations in the U.S. over the next few years. It is also looking at inorganic growth in this market.
For the full year ended 31 March 2003, UPL registered a 40% rise in net profit to Rs 50.38 crore (Rs 36.07 crore) on a 9.5% increase in net sales to Rs 658.71 crore (Rs 601.80 crore).
A good monsoon this year is expected to boost UPL' s fortunes further.