United Breweries - Improving Supply Chains To Boost Market Penetration: Motilal Oswal

Motilal Oswal Report

There are numerous challenges for United Breweries Ltd., including stiff competition from both local and international brands in India, along with regulatory issues in the industry.

The company’s premium portfolio has been growing strongly, although the pace of growth was slower than that of the other premium brands for the majority of FY24. Over FY24-27E, we estimate a compound annual growth rate of 12%/29%/35% in sales/Ebitda/adjusted profit after tax.

Despite factoring in healthy growth and margin recovery, the stock trades at 86 times/64 times FY25E/FY26E earnings per share.

We expect Ebitda margin to recover in FY25 and FY26, and any delay in margin recovery can potentially lead to earning cuts.

Due to expensive valuations and risk of muted margin recovery, we maintain our Sell rating on the stock with a target price of Rs 1,800 (50 times June-26E EPS).

Click on the attachment to read the full report: 

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.