United Spirits may rally to Rs 700, says SP Tulsian

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United Spirits may rally to Rs 700, says SP Tulsian

United Spirits may rally to Rs 700, says SP Tulsian, sptulsian.com.

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Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about United Spirits See messages about United Spirits

United Spirits may rally to Rs 700, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "I am more positive on United Spirits because if you see the largest spirit maker in the world selling 140 million cases and current year EPS is Rs 40 and I don't have my doubts that they will be able to post 20% CAGR for next three years or at least four years. If you see in last three years they have moved from number three to number one spirit maker in the world. Now with the marketcap of close to about Rs 6000-6500 crore maybe 7000 crore it must have moved and topline to ratio 1 and even on earning multiple if you see even going for FY13 I am expecting EPS to be at about 48 because this has dislodged Diageo which has been selling 106 million cases per year against that this company has been selling 140 million and if you see it's 52-week high has been at about Rs 1500, close to about Rs 1460-1480."

He further added, "I don't know the reason for such a big fall because there was lot of negative perception building up on all the UB Group stocks more especially on United Breweries and United Spirits. First United Breweries has corrected and then United Spirits, but I don't see any reason for the share to fall so much, so probably I think that today the renewed buying interest has come in the stock at the lower level. I won't be surprised to see the institutional buying, which must have come in the stock because FIIs are already holding 53% stake against 28% by the promoters, so any delivery based buying or any institutional buying must have led to the short covering also and this trend is likely to continue. I won't be surprised to see the price moving close to Rs 700 maybe in the next 1 month or so and there maybe things should take some respite and then consolidate at those levels."