UPL Shares In Focus As HSBC Hikes Target Price — Bets Big On High-Growth Advanta Seeds
The brokerage firm believes key growth drivers are in place for Advanta that support its valuation and long-term value creation prospects.
Shares of UPL Ltd. will be in focus heading into trade on Thursday after HSBC issues a target price hike on the counter, citing favourabel long-term growth outlook for subsidiary Advanta.
The brokerage firm has maintained a 'buy' call on the counter, while raising the target price from Rs 850 to Rs 925. This comes on the back of positive sentiment over Advanta and its growth prospects in the years to come.
In its latest note, HSBC has labelled Advanta as a long-term value creator with robust delivery.
The brokerage firm believes key growth drivers are in place for Advanta that support its valuation and long-term value creation prospects.
Recent media reports indicate that UPL is actively exploring capital market options for Advanta, which HSBC believes could bode well for UPL as an entity, potentially unlocking value and helping with debt reduction.|
Indeed, a potential listing for Advanta could help UPL crystallise the value of the high-growth seeds business.
The company has already made strides in deleveraging, having previous raised $350 million by selling a roughly 12.5% stake in Advanta to private equity firm Alpha Wave Global.
With a footprint in over 80 countries, Advanta has positioned itself as a key player in important agricultural markets, particularly in Latin America and Asia. The integration of UPL's post-harvest business, DECCO, into Advanta has further strengthened its 'seeds-to-post harvest' value proposition.
This is something HSBC is bullish on and as such, the brokerage firm has voiced confidence in the UPL stock, with its latest target price hike implying a 15% upside for the stock from current levels.
Shares of UPL closed on Wednesday at Rs 804.5. In the past 12 months, the stock has gained as much as 50%.
