United Phosphorus is going from strength to strength on the reckoning that prospects for the company are likely to improve this fiscal.

The scrip of the fertiliser maker hit a new 52-week high of Rs 222.50 in morning trades today. It eased later to Rs 221, up 8.23%. Substantial volumes of nearly 10 lakh United Phosphorus (UPL) shares were traded on BSE by 11:40 IST. The scrip has now risen 82.6% from Rs 121 on 17 April 2003.

The stock of UPL has been the focus of institutions over the last few sessions following good future prospects seen for the company. Yesterday, Jardine Fleming was believed to have bought 2.25 lakh UPL shares from the market.

Rumours indicate that the foreign brokerage must have bought it for Alliance Capital Mutual Fund. The latter has been active on the counter for quite some time now. Alliance Capital Mutual Fund already has a holding of over 4% in UPL as on 31 May 2003.

UPL is a leading international producer of generic crop protection products, intermediates and other industrial chemicals. It is one of the largest agrochemical producers in India with a wide range of products that include fumigants, fungicides, insecticides, rodenticides and herbicides.

With the monsoon expected to be normal, players feel that UPL's revenues will see a substantial improvement.

In fact, revenues are also expected to increase following the company's new acquisition. Recently, the company entered into an agreement with Dow AgroScience LLC, USA, for purchase of rights, title, interest, associated goodwill, trade marks, contracts, inventories, registrations, etc of Oryzalin's herbicide business including Surflan herbicide and all Surflan based pre-mixes, throughout the world, except Switzerland and the European Union.

Under the agreement, the company and its subsidiaries throughout the world can start selling Surflan immediately, except in the countries mentioned above. This purchase will add to the product portfolio of the company and expand its market presence in the segment of citrus, fruit and nut trees and specialty crop markets. The consideration paid for the purchase of the business including inventories is U.S. $ 21.3 million.

The rise in the stock is also on news that the company's restructuring activities over its subsidiary Search Chem, which it had merged with itself, have been completed. Search Chem manufactures industrial and speciality chemicals, which include chlor-alkali products, caustic soda, caustic chlorine and HEDP. Recently in March 2003, UPL merged loss making Search Chem Industries with itself.

Players say the acquisition of Search Chem will help UPL as the products manufactured by the former are largely used by UPL as intermediary products.

Meanwhile, UPL has also been focussing on exports with product registrations abroad. The US and the UK are its major markets accounting for over 75% of exports. UPL, currently, has eight product registrations in the US and 30 across Europe. UPL is targeting 2-3 product registrations in the U.S. over the next few years. It is also looking at inorganic growth in this market.

For the full year ended 31 March 2003, UPL registered a 40% rise in net profit to Rs 50.38 crore (Rs 36.07 crore) on a 9.5% increase in net sales to Rs 658.71 crore (Rs 601.80 crore).

As on 31 March 2003, promoters held 34.07% stake in UPL, while the public, institutions and foreign bodies held 24.94%, 23.94% and 14.60% respectively.