Add United Spirits, target price Rs 900: HDFC Securities

HDFC Securities has add call on United Spirits with a target price of Rs 900. The current market price of United Spirits Ltd. is Rs 811.1. Time period given by analyst is one year when United Spirits Ltd. price can reach defined target.

United Spirits Ltd., incorporated in the year 1999, is a Large Cap company (having a market cap of Rs 58814.14 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-2021.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 2559.50 Crore, down -13.16 % from last quarter Total Income of Rs 2947.50 Crore and up 14.52 % from last year same quarter Total Income of Rs 2235.00 Crore. Company reported net profit after tax of Rs 178.60 Crore in latest quarter.

Investment Rationale
The brokerage remains positive on the premiumisation trend in the liquor industry (unlike many FMCG categories). While state-wise pricing actions and portfolio reshuffle benefits will remain the key monitorables in the near term. It values UNSP at 50x P/E on Mar-24E EPS (standalone) to arrive at a TP of INR 900 (including INR 48/share of non-core assets). Maintain ADD.

Promoter/FII Holdings
Promoters held 56.73 per cent stake in the company as of 31-Mar-2022, while FIIs owned 17.73 per cent, DIIs 10.41 per cent.