>United phosphorus(GS)

We reiterate Buy on United Phosphorus (Uphos) with a new 12-month TP
of Rs120 (earlier Rs220) implying potential upside of 33% from the current
level. Our calculations indicate that Uphos share price implies a 25%/18%
decline in revenues and net income over FY10E-12E which we view as
unjustified. We believe Uphos to have a steady earnings profile as 1)
Unlike fertilizers, agchem is relatively well positioned to withstand the
agriculture downcycle; 2) Demand for agchem is less elastic to economic
cycles; 3) Industry is consolidated with strong entry barriers; and 4)
Benefits of Cerexagri integration would start reflecting from FY2010E.

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