Buy United Breweries, target price Rs 1900: Emkay Global

Emkay Global has buy call on United Breweries with a target price of Rs 1900. The current market price of United Breweries is Rs 1650.25.

Time period given by analyst is one year when United Breweries Ltd. price can reach defined target.

United Breweries Ltd., incorporated in the year 1999, is a Large Cap company (having a market cap of Rs 43793.42 Crore) operating in Beverages - Alcoholic sector.


United Breweries Ltd. key Products/Revenue Segments include Other Operating Revenue, Scrap, Others, Non-Alcoholic Beverages and Royalty Income for the year ending 31-Mar-2021.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 1125.63 Crore, down -27.67 % from last quarter Total Income of Rs 1556.30 Crore and down -10.97 % from last year same quarter Total Income of Rs 1264.30 Crore. Company reported net profit after tax of Rs 30.94 Crore in latest quarter.

Investment Rationale
The brokerage expects UBBL to grow faster within alcobev coverage, given category underpenetration, favorable policy changes and continuing market share gains. Full unlocking and regulatory easing (Delhi policy change) are likely to boost growth ahead. It now values UBBL at 55x Sept-23E EPS (vs. 27x EV/EBITDA/47x Sept-23E EPS [implied]), arriving at a target price of Rs1,900 (Rs1,570 earlier).

Promoter/FII Holdings
Promoters held 72.7 per cent stake in the company as of June 30, 2021, while FIIs held 9.8 per cent, DIIs 11.3 per cent and public and others 6.2 per cent.