Add United Spirits, target price Rs 875: HDFC Securities

HDFC Securities has add call on United Spirits with a target price of Rs 875. The current market price of United Spirits Ltd. is Rs 868.

United Spirits Ltd., incorporated in the year 1999, is a Large Cap company (having a market cap of Rs 62745.25 Crore) operating in Beverages - Alcoholic sector.

United Spirits Ltd. key Products/Revenue Segments include Beverages (Alcohol), Income From Franchise, Scrap and Other Operating Revenue for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 2918.60 Crore, up 19.36 % from last quarter Total Income of Rs 2445.30 Crore and up 16.21 % from last year same quarter Total Income of Rs 2511.40 Crore. Company reported net profit after tax of Rs 548.20 Crore in latest quarter.

Investment Rationale
Given the Q2 beat and a heathy trend sustaining in P&A, the brokerage increases EPS by 8/3/3% for FY23/FY24/FY25. It values UNSP at 45x P/E on Sep-24E EPS (standalone) to arrive at a TP of INR 875 (including INR 50/share of non-core assets).

Promoter/FII Holdings
Promoters held 56.73 per cent stake in the company as of 30-Jun-2022, while FIIs owned 16.76 per cent, DIIs 10.86 per cent.