Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

High Yield Experts

Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

Credit

We view UPL Limited as “Low Risk” on the LARA scale, mainly due to the company’s robust business profile. UPL has global scale, being the fifth-largest generic agrochemical company in the world and the largest player in the post-patent segment. The industry enjoys reasonable pricing power and profitability due to the high barriers to entry, namely: [1] regulations; [2] the years-long registration process; and [3] the sales and distribution network. Geographical exposure is diversified, with 40% of UPL's 9M/21-22 revenues derived from LatAm, 14% each from North America and Europe, 17% from Rest of the World and 14% from India, which accounts for 40-50% of total volume production. Thus, the company's ratings are not limited by India’s sovereign rating. On the flip side, the credit profile is weighed down by: [1] UPL's seemingly aggressive financial policies and appetite, as seen in the USD 4.2 bn acquisition of Arysta LifeScience in 2019; and [2] the below-par financial metrics for the BBB ratings, albeit these are improving rapidly. There is event risk from either another potential major acquisition or UPL's buyout of TPG and ADIA's stakes (11% each) in subsidiary UPL Corp, which would increase leverage. Our Credit Bias on UPL is “Stable”, as the robust business profile, strong FCF generation and improving financial metrics should help the company weather the volatile environment stemming from the Russia-Ukraine war.

 We view UPL Limited as “Low Risk” on the LARA scale, mainly due to the company’s robust business profile. UPL has global scale, being the fifth-largest generic agrochemical company in the world and the largest player in the post-patent segment. The industry enjoys reasonable pricing power and profitability due to the high barriers to entry, namely: [1] regulations; [2] the years-long registration process; and [3] the sales and distribution network. Geographical exposure is diversified, with 40% of UPL's 9M/21-22 revenues derived from LatAm, 14% each from North America and Europe, 17% from Rest of the World and 14% from India, which accounts for 40-50% of total volume production. Thus, the company's ratings are not limited by India’s sovereign rating.  On the flip side, the credit profile is weighed down by: [1] UPL's seemingly aggressive financial policies and appetite, as seen in the USD 4.2 bn acquisition of Arysta LifeScience in 2019; and [2] the below-par financial metrics for the BBB ratings, albeit these are improving rapidly. There is event risk from either another potential major acquisition or UPL's buyout of TPG and ADIA's stakes (11% each) in subsidiary UPL Corp, which would increase leverage.  Our Credit Bias on UPL is “Stable”, as the robust business profile, strong FCF generation and improving financial metrics should help the company weather the volatile environment stemming from the Russia-Ukraine war.

UPL Limited - Tear Sheet - Lucror Analytics

UPL Ltd

UPL Limited - Tear Sheet - Lucror Analytics