MOSL: UNITED SPIRITS (Buy)-In-line operating results, outlook looks better for FY20/21
United Spirits: In-line operating results, outlook looks better for FY20/21
(UNSP IN, Mkt Cap USD5.6b, CMP INR540, TP INR675, 25% Upside, Buy)
- 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).
- Concall highlights: (1) Management is seeing some recovery in sentiment post elections; it expects the improvement to continue; (2) 10 odd states saw price increase in the range of 1.5-5% over the last 5-6 months; (3) Management believes that working capital improvements in FY19 are sustainable.
United Spirits Limited is a spirits company engaged in the business of manufacture, purchase and sale of alcoholic beverages. The Company operates through two segments: India and Outside India. The India segment is engaged in the business of manufacture, purchase and sale of Beverage Alcohol (Spirits and Wines), including through Tie-up units/brand franchisees within India. The Outside India segment is engaged in the business of manufacture, purchase and sale of Beverage Alcohol (Spirits and Wines), including through Tie-up units/brand franchisees outside India. Its product portfolio includes whisky, vodka and rum segments, and caters to various consumers through luxury, premium, prestige and popular spirits categories. Its brand portfolio includes McDowell's No.1, Royal Challenge, Signature and Antiquity. It has over 80 (74 excluding Royalty and Franchise units) manufacturing facilities spread across approximately 20 states and over three union territories in India.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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