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Yes Securities Report
United Spirits Ltd. Q2 FY25 operating performance was better than expected as miss on volumes was more than offset by strong margin performance. Overall volumes de-grew by 4.4% as Prestige & Above volumes were down 3.7% YoY impacted by front loading in Q1 (called-out in Q1), high base due to festive inventory build-up and muted demand.
Ebitda margin came in at 17.8% driven by headline pricing, continued revenue growth management and productivity initiatives off-setting inflation.
Festive season and openingup of Andhra market are positives going forward but with slowdown in urban market we will have to be watchful about any negative surprise.
The stock is already up ~22% post our recent initiation (dated June, 04 2024). We remain fundamentally positive and roll-forward our target price to FY'27E earnings per share, deriving a revised target price of Rs 1,595, targeting ~54 times on Mar'27E EPS of standalone business + RCSPL. Maintain 'Add' rating
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