Buy United Spirits; target of Rs 1050: ICICI Direct

ICICI Direct's research report on United Spirits

United Spirits (USL) is India’s leading alcoholic beverage company and subsidiary of global leader Diageo plc. It manufactures, sells premium liquor brands such as Johnnie Walker, Black Dog, Black & White, Vat 69, Antiquity, Signature, Royal Challenge, McDowell’s No 1, Smirnoff and Captain Morgan. Prestige and above segment comprises 80% of its volumes • It aims to grow its revenues in double digits and expects its operating margin to remain in mid to high-teen levels in the medium term.

Outlook

We remain positive on the long term growth prospects of the stock and maintain our BUY recommendation. We value USL at Rs 1050 i.e. 64x P/E on FY24E EPS.

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