Deutsche Bank maintained Buy call on United Spirits with a target price of Rs 3,800, implying 27.78 percent upside from Friday's closing levels.
United Spirits shares rallied 5.5 percent to Rs 3,137.15 on Monday after the GST Council has not considered taxing extra neutral alcohol (ENA) in its meeting on Saturday.
The stock had declined 10 percent over the last one month on worries of ENA taxation under GST.
"No mention/decision about ENA in the GST Council meet of March 10 provides an upside trigger," Deutsche Bank said while maintaining Buy call on the stock with a target price of Rs 3,800, implying 27.78 percent upside from Friday's closing levels.
Ethyl alcohol is a highly concentrated form of spirit which is used in making alcoholic beverages. While it is mainly used for the production of potable alcohol (90 percent usage), it also used as an ingredient for the manufacturing of personal care products (perfume, toiletries etc.) as well as a solvent in paints and printing ink industry.
Apart from expectations of approval for the rollout of electronic-way bill, change in certain rules pertaining to the anti-profiteering mechanism and simplification of the return filing process, analysts or media houses were also expecting the inclusion of extra neutral alcohol or ethyl alcohol under the GST net.
The GST Council headed by Finance Minister Arun Jaitley approved the rollout of inter-state e-Way bill from April 1, deferred the liability to pay tax on reverse charge mechanism until June 30 and extended tax exemption benefits to exporters for another six months.Radico Khaitan also gained 3 percent, GM Breweries was up 2.2 percent and United Breweries rose 1.8 percent on the BSE.