Motilal Oswal is bullish on United Spirits has recommended buy rating on the stock with a target price of Rs 675 in its research report dated May 30, 2019.
Motilal Oswal's research report on United Spirits
Standalone net sales grew 3.5% YoY to INR22.5b (our est. INR22.6b), with reported volumes growing 1% YoY (our est. 2% decline); underlying volumes were up 2%. Prestige & above volumes grew 7.1% YoY while Popular volumes were down 4.5% YoY (underlying Popular volumes declined 3% YoY). EBITDA grew 2.9% to INR2.8b (our est. INR2.87b). Underlying* EBITDA grew 8% YoY. Adj. PAT declined 29.3% to INR1.31b (our est. INR1.47b).
Valuations of 31.8x FY21EPS and 20x FY21EV/EBITDA are at 15%/20% discount to consumer peer average. Maintain Buy rating with DCF-derived TP of INR675.
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