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The two stocks UPL Ltd and Lupin Limited would have made you a crorepati now if you had invested in any of the stocks over 20 years ago. The shares of UPL Ltd. have risen from Rs. 1.20 on the 5th of July 2002 to 742.50 as of the 5th of August 2022 at 3:30 pm IST, representing a multibagger return of 61,775.00 per cent over the past 20 years. The shares of Lupin Limited have risen from 2.33 as of 8th January 1999 to the present level of 669.40 as of 5 August 2022, 3:30 pm IST, resulting in a staggering multibagger return of 28,629.61 per cent over the last 23 years. These stock prices demonstrate how investing, in the long run, may result in multibagger profits.

UPL Ltd

The broking firm Geojit has said in a note that “UPL registered a stellar 27.1% YoY revenue growth to Rs. 10,821cr in Q1FY23, supported by solid volume growth, forex gains, and improved price realisation. Geographically, sales from North America grew 47.1% YoY to Rs. 1,796cr, driven by substantial growth in Herbicide backed by higher volume and pricing levels. North Europe sales rose 13.5% YoY to Rs. 1,728cr, partially offset by the euro’s devaluation, product ban, and the supply-chain impact of Russia-Ukraine conflict. A robust 38.2% YoY sales growth to Rs. 3,464cr in LATAM was propelled by higher herbicide prices and double-digit growth in NPP BioSolutions brand. Business in India showed moderate growth of 8% YoY as plantation timings were affected. ROW achieved 30.7% YoY growth despite the impact of Chinese lockdowns, JPY devaluation, and supply issues. EBITDA increased 25.8% YoY to Rs. 2,343cr in Q1FY23, compared with Rs. 1,863cr in Q1FY22, due to efficient supply-chain management and improved realisations across the herbicide portfolio. EBITDA margin declined a marginal 23bps YoY because of higher SG&A expenses. Adjusted profit after tax rose 29.1% YoY to Rs. 955cr."

“With increased sales volumes, higher realisations, raised guidance for revenue and EBITDA, and product innovation via partnerships, the company is expected to register robust growth in the quarters to come. We expect PAT to log a 21.1% CAGR over 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 the research analysts of Geojit.

On the other hand, the brokerage firm Sharekhan has said “Industry-leading growth and target to increase revenue share from differentiated and sustainable solutions would improve margin/earnings profile and drive sustainable growth and valuation re-rating. Moreover, risk-reward seems favourable, given attractive valuations of 11.8x/9.8x its FY2023E/FY2024E EPS, considering strong growth outlook (we expect PAT CAGR of 23% over FY22-24E and RoE of ~21%). Hence, we maintain a Buy rating on UPL with an unchanged price target (PT) of Rs. 930."

The brokerage firm Prabhudas Lilladher has said that “Citing positive demand scenario globally coupled with better realizations, UPL raised its revenue and EBITDA growth guidance to 12-15% and 15-18% in FY23E (earlier 10% and 12-15% YoY), with growth to be driven by focus on differentiated solutions and new product launches. While, the company expects to reduce debt by USD400mn in FY23E. We broadly maintain our FY23/24 estimates. We expect UPL to clock Revenue/PAT CAGR of 11%/20% over FY22-24E. Maintain ‘BUY’ with a revised TP of INR1020 (earlier Rs1010) based on 14xFY24E EPS."

In the previous 20 years, UPL Ltd. shares have returned 61,775.00 per cent, which means that an investment of Rs. 1 lakh would now be worth Rs. 6.18 Cr. The stock's most recent closing price was Rs. 742.50, and YTD, it has dropped 2.84 per cent so far in 2022.

Lupin Limited

Considering the Q1FY23 results of Lupin, the brokerage firm Sharekhan has said in a note that “Lupin Limited (Lupin) reported a weak performance for Q1FY2023. Operating profit margin (OPM) surprised negatively, marred by confluence of factors such as pricing pressures in the US and remediation cost at its plants. This coupled with overall cost escalations resulted in OPM declining by 1552 bps yoy. Consequently, the company reported net loss of Rs. 89 crore for Q1 as compared to Rs. 505 crore profit in Q1FY2022. Results missed estimates. Going ahead, management has shared a strong growth outlook across its US and India businesses. While cost-control measures and efforts to transition the product portfolio from generics to complex generics would drive growth in the US business, India sales are also expected to stage double-digit growth in the remainder of three quarters. Further, given cost-control measures and few high-value launches lined up in the US, Lupin expects to exit FY2023 with 18% OPM as compared to 6.2% in Q1FY2023, which points at a marked improvement."

“Lupin in the midst of a cost-control program, wherein it is focusing on reducing cost through addressing system inefficiencies and realigning the cost structure. This coupled with the completion of shelf stock adjustment and trade inventory rationalization could improve US business performance remarkably starting from Q2FY23 and the management seems quite confident of a strong bounce back. Further, Lupin sees India business to be growing in double digits in the subsequent three quarters of FY2023, backed by an improvement in chronic therapy products. At the CMP, the stock trades at 28.9/17.8x its FY2023E/FY2024E EPS, which is at a discount to its peers as well. Based on the encouraging outlook, we retain our Buy recommendation on the stock with an unchanged price target (PT) of Rs. 780," said the research analysts of the broking company Sharekhan.

An investment of 1 lakh placed in Lupin Limited shares 23 years ago would have now grown to 2.87 Cr thanks to the stock's multibagger return over the past 23 years of 28,629.61 per cent. On Friday the stock closed at 669.40 apiece, and on a YTD basis, the stock has dropped 29.18% so far in 2022.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. 

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