The liquor maker is likely to continue delivering strong organic growth; recent stock correction a good entry opportunity
AABL’s margins in recent quarters have been eroded by the higher prices of raw materials
Ventura Securities is bullish on Associated Alcohols and Breweries has recommended buy rating on the stock with a target price of Rs 870 in its research report dated September 28, 2021.
Current weakness in stock an opportunity to go long
Despite a clean balance sheet and an exciting growth potential, Associated Alcohols is trading at relatively inexpensive valuations of 11 times FY22 earnings
AABL’s volumes are expected to improve further following its recent foray into Uttar Pradesh — one of the largest liquor markets in the country
Liquor consumption presents an attractive opportunity in India for Associated Alcohols & Breweries (AABL) as the country has a large young population and remains an underpenetrated market in the alcoholic beverage segment
At its current market price, the stock is trading at a reasonable valuation of nearly 15 times FY19 estimated earnings
Radico Khaitan commands 6 percent volume share in the IMFL segment. Its Magic Moments vodka brand is highly popular in the mid-market segment and commands a market share of more than 50 percent