I was still on a high, fresh out of hosting the IDFC annual investor conference — The Stock Called India — when Outlook Business popped this question — which is the one stock you would place your bet on in 2015?
Of course, one need not be a pundit to understand that India is on the cusp of the next growth phase. Most of the ingredients are in place: bottoming out of economic growth, a sharp fall in prices of crude, gold and other commodities, slowing inflation, a powerful government and a very optimistic population and India Inc. It is with this backdrop that several investors from across the globe at the conference scanned the marketscape for answers to the same questions: with the market having seen the worst in the past few years, which are the gems that will find fresh radiance under the new dispensation? Which are the Indian companies that will redeem the lost pride of the India story?
Faced with this unenviable task and with so many contenders to the throne, my mind went back to a company we had visited in early 2013. I am talking about UPL (then United Phosphorus), a company that had the genetic code of an Indian company with global ambitions embedded in its DNA. Starting off as a niche specialty chemicals firm catering to domestic markets, UPL became the third-largest manufacturer of generic crop-protection chemicals in 15 years thanks to the around $700 million spent on 14 global acquisitions across multiple climatic zones. Key elements that made UPL a game-changer among Indian peers (largely contract manufacturers for Western majors) were low-cost plants in India supporting an increase in global operations and forward integration, product registrations, marketing and distribution that targeted the global markets directly.
But FY09-12 saw significant volatility across the value chain, as product pricing has a strong correlation with agri commodity prices and raw material pricing is dictated by crude oil prices. That, coupled with increas