Global brokerage CLSA gave 'Outperform' call for Radico Khaitan and 'Hold' rating for United Spirits Ltd.
At 10:55 am on July 29, United Spirits shares were trading 1% lower at Rs 1,303 apiece after CLSA initiated coverage with ''Hold' call with target price of Rs 1,238 per share.
"UNSP is well-positioned with a strong prestige-and-above portfolio and access to Diageo brands. Policy changes may limit near-term growth, though long-term outlook remains positive," said CLSA, adding that it finds the 54x one-year forward PE valuation demanding.
Meanwhile, CLSA initiated coverage on Radico Khaitan, another spirits maker, with an 'Outperform' call and a target price of Rs 3,098 per share.
The target price indicates up to 15% upside from the current market price of Rs 2,698.
"Radico is a leading white spirits maker in India, expanding into premium and luxury segments," said CLSA.
CLSA flagged Radico Khaitan's strong brand creation track record even though profit delivery has been inconsistent.
CLSA expects 265 bps EBITDA margin expansion for Radico Khaitan to 16.5% by FY28.
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