UNITDSPR - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.1

Here’s a deep-dive into United Spirits Ltd. (UNITDSPR) — India’s leading alco-bev company with strong profitability and brand power but currently trading at a premium valuation.

🧾 Core Financials Snapshot

Return Metrics

ROCE: 28.7%, ROE: 21.4% — excellent capital efficiency and high shareholder value creation

EPS: ₹21.8 — healthy earnings profile; signals scalable business model

Profitability & Growth

PAT Q-o-Q: ₹380 Cr → ₹421 Cr — solid quarterly momentum

Qtr Profit Var: +61.0% — impressive surge, signals margin expansion or volume recovery

Debt-to-Equity: 0.06 — virtually debt-free, enabling operational flexibility and reduced risk

📊 Valuation Analysis

Metric Value Interpretation

P/E Ratio 59.1 Very expensive — almost double industry PE (32.9); growth already priced in

P/B Ratio ~11.9 Significant premium — only justified with sustained ROE and brand power

PEG Ratio 2.82 Indicates premium valuation vs. growth rate — potential caution for buyers

Dividend Yield 0.91% Minimal; decent for passive investors but not a major draw

🍸 Business Model & Competitive Advantage

Segments: Premium spirits, mass-market brands, exports

Brand Portfolio

Signature, McDowell’s No.1, Royal Challenge, and Johnnie Walker (via Diageo link)

Strengths

Brand-led pricing power and consumer stickiness

Economies of scale and pan-India distribution

Diageo's global backing brings quality, innovation, and governance

Challenges

Regulatory constraints and excise duties

Volatile input costs (grain, packaging)

Price elasticity in lower-tier markets

📉 Technical Outlook

RSI: 32.0 — approaching oversold zone; stock might be bottoming out

MACD: -33.8 — bearish, suggesting short-term weakness persists

DMA Status

Current price below both 50-DMA and 200-DMA — weak momentum

Could attract bargain-hunters if price stabilizes near support

🎯 Entry Strategy & Long-Term Guidance

Suggested Entry: ₹1,275–₹1,320 — good range given RSI and support levels

Target Range: ₹1,600–₹1,700 over 12–18 months, assuming margin resilience and demand growth

Investor Profile Fit

Best for long-term investors who value brand-led growth

Less ideal for value investors due to stretched valuations

Would you like a side-by-side comparison with Radico Khaitan or UBL to assess how premium plays stack up across the alco-bev landscape? Or I could help chart a demand forecast based on urban consumption and festive triggers. Let’s toast to smart investing 🥂

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