Sell and exit Hikal, rather go for UPL as a long-term buy: Sudip Bandyopadhyay

economictimes.indiatimes.com:

Sudip Bandyopadhyay, Group Chairman, Inditrade Capital, says if somebody is a long-term investor with one year plus time horizon, UPL is a fantastic buy and they should have it in their portfolio. They are one of the largest agrochemical players in the world. They have a very geographically diversified business which is fantastic for this space and they are doing all the right like dthings ebt reduction, cost cutting, inventory liquidation.For long-term investors, is UPL a good stock to buy in the sense of the kind of guidance they give? They talked about the second half improvement, cost cutting measures, all of that. In this 50% fall from top, do you think everything is priced in?Absolutely.

UPL is a fantastic company. This is one of amongst the top five agrochemical companies in the world. The last acquisition led to a lot of debt in the balance sheet.

One good thing they have done is that they have been reducing the debt continuously and in a systematic manner, which is an excellent thing for the company's balance sheet. As you rightly mentioned, major steps on cost reduction are being taken. They plan to take out about $100 million worth of cost over the next few months.

Inventory liquidation also is a major focus area for UPL and many other chemical and agrochemical companies. The challenge for these companies have been because of intense competition from Chinese manufacturers and low demand in their markets like Europe, US and other global geographies because of the recession-like atmosphere in these countries. Now, if somebody is going to buy for a short term, I would say do not get into it because it will take some more time before demand recovers and the business and volumes recover for these companies.