United Breweries, United Spirits great buys for long term: Destimoney Securities

MUMBAI: Shares of United Breweries and United Spirits have catapulted in the last one week on the back of renewed interest from institutional investors after the recent correction.

Morgan Stanley Asia increased its exposure to United Spirits by buying about 10.80 lakh shares for an estimated Rs 229 crore. Other institutional investors have also been picking up United Breweries from the open market.

United Breweries has surged around 47 per cent while United Spirits has gained over 11 per cent in the last one week.

The rise in these counters at a time when the USL group is in the process of transferring shares to Diageo. The company enjoys a dominant position in the domestic beer market and the tie-up with Netherlands based Heineken is likely to help target the high-end segment.

“Both these scripts i.e. United Breweries and United Spirits are excellent companies. If there was at all a problem, the problem was with the management’s distraction with their other companies which were not doing well. With the restructuring happening, with the new owners coming in as far as USL is concerned, things are bound to improve,” said Sudip Bandyopadhyay, MD & CEO, Destimoney Securities to ET Now.

“They are excellent companies with profitability, margin, market share, everything outstanding. Investors will definitely gain if they invest in these stocks. Yes, the price has moved up quite a bit, but still for a long-term investor, these are great buys. However, one has to remember that these may not be a very-very short-term bet because the price has already moved up,” he added.

At 11:15 a.m.; United Breweries was at Rs 895.50, up 8.65 per cent, on the BSE. It touched a high of Rs 925 and a low of Rs 806 in trade today.

United Spirits was at Rs 2,412.85, down 1.93 per cent, on the BSE. It touched a high of Rs 2,485 and a low of Rs 2,395.45 in trade today.