United Spirits can deliver good returns in long-term: Pankaj Pandey, ICICIdirect.com

In a chat with ET Now, Pankaj Pandey, HoR, ICICIdirect.com, shares his views on United Spirits.

ET Now: How are you approaching United Spirits? Post the open offer now getting done with and some massive correction coming in the stock, we have seen some buying come in on Friday. Do you think it is a good price and would you recommend buying at dips for United Spirits?

Pankaj Pandey: If you look at from earnings perspective, this stock is substantially expensive. So if you look at from a one or two-year earning perspective, it will be very difficult for you to buy. But if you look at some of the key factors, like the promoters are very keen on hiking the stake in the company, Diageo has been working on premiumisation and that is what they have done in a number of other global markets in which they have a presence. So if you look at it from a premiumisation perspective, this stock can really deliver good set of returns over the next 5 to 10 years but nothing from a shorter term perspective. The recent correction is good correction because liquor industry itself is quite small in India and again if you look at Indian made foreign liquor and country made foreign liquor, they have roughly the same size of cases. So again, here if the premiumisation happens, this company will be the biggest beneficiary for market cap of less than odd 40000 crores. From an opportunity perspective, we would like to believe that this stock will deliver but nothing from a shorter term perspective but this stock is part of our portfolio. So we have a target price in excess of 3000 on this particular stock.