The recent announcement of the company on the partnership in order to commercialize the rinxipir molecule even more increased its profit prospects. The Indian company announced long-term strategic cooperation with FMC Corp., one of the world market leaders in the field of agricultural sciences. The agreement provides UPL access to key markets before the expiration of the patent for the commercialization of RynaxyPyr Active, the FMC master insecticide.
UPL will produce and deliver rinxipir for FMC in India, and FMC is to supply the active ingredient for UPL in some markets. According to analysts, early access to the recipe in key markets gives UPL advantage in expanding its portfolio of agricultural solutions.
"The transaction adds an important product to the UPL portfolio and supports FMC in the maximum penetration of this important active ingredient," the company said.
In 2019, the world rinxipir market was estimated at 1.6 billion dollars, which is a significant indicator. For comparison, the global market for plant protection products as a whole is estimated at $ 59.8 billion. The molecule finds the main application to protect rice, soybean, vegetable and fruit crops.
The rinxipir market will be expected to grow at a speed of 4.4% per year during the 2018-2025 and reach $ 2.1 billion by the end of 2025, analysts Motillal Oswal Financial Services Ltd.
"According to the industry source, the paid production and delivery of rinxipir for FMC in India will provide UPL the possibility of long-term growth in the amount of 700-800 crore," added Motilla Oswal analysts.
As the rinxipir molecule strengthens the UPL portfolio, the company continues to grow in key geographic regions and intends to restore the growth rate in Latin America in this quarter.
In addition, the company benefits from improving the synergistic effect from the purchase of ARYSTA. According to analysts Elara Securities (India) Pvt, the costs of costs in the third quarter of 21 fiscal year amounted to 260 Cror, and the synergy of income is 410 Cror.
The company planned to reduce debt to 700 million dollars in the second half of 21 fiscal years. Of these by the end of December, the debt in the amount of $ 410 million was repaid. According to analysts, debt reduction remains critically important for the prospects for the growth of the value of shares.
(Sources: news.agropages.com; Livemint.com).