Buy United Spirits, fair value Rs 660: Kotak Institutional Equities

Kotak Institutional Equities has upgraded United Spirits to buy from reduce in the long term and revised fair value to Rs 660 from Rs 670. The stock ended down 3.75 per cent at Rs 504.60 on Wednesday while the BSE Sensex closed 1709.58 points down (-5.59%) at 28,869.51.

Investment Rationale

United Spirits has executed well on premiumisation and non-cost of goods sold cost optimisation over the past few years notwithstanding a weak demand environment and RM headwinds, said Kotak. Even as demand environment remains challenging, raw material prices have stabilised and valuations have turned attractive, said Kotak.


Financials

For the quarter ended 31-12-2019, the company has reported consolidated sales of Rs 2587.60 crore, up 11.81 per cent from last quarter sales of Rs 2314.20 crore and up 2.91 per cent from last year same quarter sales of Rs 2514.40 crore. The company has reported net profit after tax of Rs 232.80 crore in the latest quarter.