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UBL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.7
| Stock Code | UBL | Market Cap | 38,854 Cr. | Current Price | 1,470 ₹ | High / Low | 2,300 ₹ |
| Stock P/E | 102 | Book Value | 164 ₹ | Dividend Yield | 0.68 % | ROCE | 13.9 % |
| ROE | 10.8 % | Face Value | 1.00 ₹ | DMA 50 | 1,582 ₹ | DMA 200 | 1,778 ₹ |
| Chg in FII Hold | -0.76 % | Chg in DII Hold | 0.77 % | PAT Qtr | 47.0 Cr. | PAT Prev Qtr | 184 Cr. |
| RSI | 34.8 | MACD | -47.5 | Volume | 1,13,453 | Avg Vol 1Wk | 2,10,161 |
| Low price | 1,401 ₹ | High price | 2,300 ₹ | PEG Ratio | 12.8 | Debt to equity | 0.18 |
| 52w Index | 7.65 % | Qtr Profit Var | -64.5 % | EPS | 13.8 ₹ | Industry PE | 31.4 |
📊 Core Financials
- Revenue Growth: Quarterly PAT declined sharply from 184 Cr. to 47 Cr., showing weak momentum.
- Profit Margins: EPS at 13.8 ₹ reflects modest profitability.
- Debt Ratios: Debt-to-equity at 0.18, low leverage, manageable for operations.
- Cash Flows: Likely under pressure given profit decline.
- Return Metrics: ROCE at 13.9% and ROE at 10.8% are moderate, highlighting average efficiency.
💹 Valuation Indicators
- P/E Ratio: 102, extremely high compared to industry average (31.4), suggesting severe overvaluation.
- P/B Ratio: ~8.96 (Current Price / Book Value), expensive relative to book value.
- PEG Ratio: 12.8, indicates valuation is stretched relative to growth prospects.
- Intrinsic Value: Current price (1,470 ₹) trades below DMA 50 (1,582 ₹) and DMA 200 (1,778 ₹), signaling bearish sentiment.
🏢 Business Model & Competitive Advantage
- UBL operates in alcoholic beverages, with strong brand recognition in beer and premium segments.
- Competitive advantage lies in market leadership, brand loyalty, and distribution strength.
- Profitability remains under pressure, limiting near-term attractiveness despite strong brand equity.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive only near 1,400–1,450 ₹, closer to support levels, given weak fundamentals and stretched valuation.
- Long-Term Holding: Risky unless profitability stabilizes. Suitable for investors with high risk tolerance seeking consumer discretionary exposure.
Positive
- Strong brand recognition and market leadership in beer segment.
- DII holdings increased (+0.77%), reflecting domestic institutional support.
- Low debt-to-equity ratio (0.18) ensures financial stability.
Limitation
- Quarterly PAT declined sharply (-64.5%).
- Extremely high P/E ratio compared to industry average.
- Stock trading below DMA 50 and DMA 200, reflecting bearish sentiment.
Company Negative News
- FII holdings decreased (-0.76%), showing reduced foreign investor confidence.
- Weak 52-week performance (7.65%).
Company Positive News
- DII holdings increased, showing domestic institutional support.
- Strong brand equity continues to support long-term positioning.
Industry
- Alcoholic beverages industry trades at P/E of 31.4, much lower than UBL’s valuation.
- Sector benefits from rising consumer demand and premiumization trends, but faces regulatory risks.
Conclusion
- UBL shows strong brand equity but weak profitability and stretched valuation.
- Stock is overvalued compared to industry, limiting near-term upside.
- Entry only near 1,400–1,450 ₹ offers better risk-reward; long-term holding is risky unless earnings stabilize.
I can also prepare a consumer discretionary peer comparison HTML table (UBL vs Radico Khaitan, United Spirits, Som Distilleries) to highlight relative valuation and profitability metrics if you’d like.