The brokerage believes United Spirits is well positioned, given its extensive domestic portfolio in the prestige and above segments, along with access to Diageo’s global brands as its subsidiary.
However, it said that recent policy changes could dampen near-term growth, despite a positive long-term outlook.CLSA views United Spirits’ one-year forward price-to-earnings (P/E) multiple of 54 times as demanding.
For Radico Khaitan, CLSA has initiated coverage with an ‘Outperform’ rating and a price target of ₹3,098.Radico Khaitan is a leading manufacturer of white spirits, such as vodka and gin, in India and is actively building a portfolio of premium and luxury brands across various spirit categories.
The company has a strong track record in brand creation and premiumisation, although its profit delivery has been inconsistent so far.
With recent investments in expanding capacity for premium spirits, CLSA expects the company to achieve a 265 basis points improvement in earnings before interest, taxes, depreciation and amortisation (EBITDA) margin between FY25 and FY28, reaching 16.5%.
For the March quarter, United Spirits reported a net profit of ₹421 crore, which is a growth of 74.7% year-on-year from ₹241 crore in the same quarter eriod last year. Revenue rose 9% to ₹3,031 crore, while EBITDA grew 38% to ₹460 crore. Operating margins improved to 15.2% from 12% a year ago.
Radico Khaitan had reported a 71% jump in net profit at ₹92.07 crore for the fourth quarter OF FY25. Its revenue rose 15% to ₹4,485 crore in the quarter.
Shares of United Spirits settled 0.27% higher on Monday at ₹1,313.10. On the other hand, shares of Radico Khaitan declined 1.37% to end at ₹2,665.
