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Last Updated : Jul 24, 2019 03:49 PM IST | Source: Moneycontrol.com

Accumulate United Spirits; target of Rs 655: Dolat Capital

Dolat Capital recommended accumulate rating on United Spirits with a target price of Rs 655 in its research report dated July 23, 2019.

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Dolat Capital's research report on United Spirits


UNSP’s Q1FY20 revenue grew a weak 5.6% YoY (adjusted). The gross margin also fell 359bps to 46.6%. However, EBITDA/PAT (adjusted) rose 42/98% YoY, due to steep cost control. It is likely to achieve the guided low-teens revenue growth and high teens margin in the medium term. We believe the high barriers to entry, inelastic demand, and perception as a long-term consumption play, together with transformation, through premiumisation, cost control, and de-leveraging, attract investors in UNSP. We believe in this. But, the persistent increase in per unit duties shift wallet share to government and is a structural risk.


Outlook


Accumulate, with TP of ` 655 @ 40x FY21E standalone EPS, viz. ` 632 plus ` 23 for treasury shares/RCB etc.

For all recommendations report, click here

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First Published on Jul 24, 2019 03:49 pm
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