United Spirits shares rally 3% after Q4 results. Should you buy, sell or hold?
United Spirits (USL) surged 3% on BSE in Tuesday’s session to the day’s high of Rs 1,196 after the company on Friday reported a two-fold increase in consolidated net profit to Rs 241 crore for the March quarter.
USL’s revenue from operations was up 12.41% year-on-year (YoY) to Rs 6,511 crore during the quarter under review from Rs 5,792 crore a year earlier while the total expenses in the March quarter were up 10.9% to Rs 6,279 crore.
Here is how brokerages view USL results:
JP Morgan
JP Morgan believes that premiumization-led growth for USL is in focus. FY25 revenue growth will be back-ended and aim is for a double digit topline along with a modest margin expansion in the time to come.
JP Morgan has a ‘neutral' rating for USL with a target price of Rs 1,150.
Macquarie
Macquarie stated that Q4 surprised on the backing of gross margin and PAT beat was sharper given higher other income. Consolidated performance benefited from lower-than-expected losses in subsidiaries.
Macquarie has given an 'underperform' rating for the stock with a target price of Rs 910.
ICICI Securities
United Spirits Q4FY24 revenue growth of 7% with 4% volume growth was slightly underwhelming as consumer demand conditions remain subdued with consumer rationalizing drinking occasions. That said, the premiumisation trend continues across categories and brands. Continued focus on innovation and renovation across brands with new launches in growing segments is likely to help capture premiumisation trend
while it plans to hold volumes in
