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United Spirits share price down 2% on fall in Q4 profit; UBS retains sell

UBS has a sell rating on the stock with target at Rs 480 per share. It said that the company's tax increases are likely to impact consumer sentiment.

May 28, 2020 / 10:34 AM IST
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United Spirits share price was down almost 3 percent intraday on May 28 after the company reported a decline of 57.82 percent to Rs 49.3 crore in its consolidated net profit for the fourth quarter ended March 2020, mainly impacted by COVID-led disruptions in the market and consumption slowdown.

The company had posted a net profit of Rs 116.9 crore in the January-March quarter a year ago, United Spirits Ltd (USL) said in a regulatory filing.

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The stock price has been down over 18 percent in the last 3 months and was quoting at Rs 561.40, down Rs 16.40, or 2.84 percent at 10:00 hours.

The company's revenue from operations was down 11.86 percent to Rs 6,419 crore during the quarter under review as against Rs 7,283.1 crore in the corresponding period previous fiscal.

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Research and broking firm UBS has a sell rating on the stock with target at Rs 480 per share with multiple near-term and medium-term uncertainties. It further said that the company's tax increases are likely to impact consumer sentiment, according to a report by CNBC-TV18.

Credit Suisse on the other hand has an outperform rating on the stock with target at Rs 620 per share. It is of the view that large hit to prestige volumes and aggressive cost controls help maintain margin adding that net debt reduction continues despite a spike in working capital in March. H1FY21 is likely to remain very weak, it added.

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According to Moneycontrol SWOT Analysis powered by Trendlyne, United Spirits has reported decline in quarterly net profit with falling profit margin (YoY) and degrowth in quarterly revenue and profit in recent results. However, Moneycontrol technical rating is bullish with technical indicators being bullish.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Sandip Das
first published: May 28, 2020 10:34 am

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