UNITDSPR - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.8
| Stock Code | UNITDSPR | Market Cap | 98,774 Cr. | Current Price | 1,357 ₹ | High / Low | 1,645 ₹ |
| Stock P/E | 56.5 | Book Value | 111 ₹ | Dividend Yield | 0.88 % | ROCE | 26.3 % |
| ROE | 20.0 % | Face Value | 2.00 ₹ | DMA 50 | 1,371 ₹ | DMA 200 | 1,389 ₹ |
| Chg in FII Hold | -0.25 % | Chg in DII Hold | 0.46 % | PAT Qtr | 536 Cr. | PAT Prev Qtr | 494 Cr. |
| RSI | 50.2 | MACD | -10.4 | Volume | 5,20,760 | Avg Vol 1Wk | 8,63,579 |
| Low price | 1,270 ₹ | High price | 1,645 ₹ | PEG Ratio | 3.71 | Debt to equity | 0.05 |
| 52w Index | 23.2 % | Qtr Profit Var | 2.70 % | EPS | 23.5 ₹ | Industry PE | 32.5 |
📊 Analysis: United Spirits (UNITDSPR) demonstrates strong fundamentals with ROE at 20% and ROCE at 26.3%, well above industry averages. Debt-to-equity is very low (0.05), indicating financial strength. EPS of ₹23.5 and consistent profit growth (+2.7% QoQ) support long-term sustainability. However, the stock trades at a P/E of 56.5, which is significantly higher than the industry PE of 32.5, suggesting overvaluation. PEG ratio of 3.71 also indicates limited growth-adjusted value. Technicals show neutral RSI (50.2) and weak MACD (-10.4), pointing to consolidation.
💰 Entry Price Zone: Ideal accumulation zone is between ₹1,270 – ₹1,320, closer to 52-week low and below DMA50, offering margin of safety.
⏳ Exit / Holding Strategy: If already holding, maintain with a long-term horizon (5+ years) given strong ROE/ROCE and low debt. Consider partial profit booking near ₹1,600 – ₹1,645 (recent high zone) if valuations remain stretched. Dividend yield (0.88%) adds minor income support but growth metrics justify holding for compounding.
Positive
- 🍷 Strong ROE (20%) and ROCE (26.3%) indicate efficient capital use.
- 📈 Consistent profit growth (+2.7% QoQ).
- 🏦 Low debt-to-equity (0.05) ensures balance sheet strength.
- ✅ DII stake increased (+0.46%), showing domestic institutional confidence.
Limitation
- ⚠️ High P/E (56.5) vs industry average (32.5).
- 📉 PEG ratio of 3.71 suggests limited growth-adjusted value.
- 🔻 Technical indicators (MACD negative, RSI neutral) show weak momentum.
Company Negative News
- 📉 FII holding reduced (-0.25%), showing reduced foreign investor interest.
- 🚫 Valuations remain stretched compared to peers.
Company Positive News
- ✅ Quarterly PAT improved from ₹494 Cr to ₹536 Cr (+2.7%).
- 💡 Strong brand portfolio in premium spirits market.
Industry
- 🏭 Alcoholic beverages industry PE ~32.5, lower than UNITDSPR’s valuation.
- 🌍 Sector growth driven by premiumization, rising urban demand, and lifestyle changes.
Conclusion
UNITDSPR is fundamentally strong with high ROE/ROCE and low debt, making it a good candidate for long-term investment. However, valuations are stretched, so ideal entry is near ₹1,270–₹1,320. Existing holders should maintain positions for long-term compounding but consider partial exit near ₹1,600–₹1,645 if earnings growth does not accelerate. The stock is best suited for disciplined investors focusing on margin of safety and sustainable growth.
Selva, since you’re systematically building basket overlays, would you like me to prepare a peer benchmarking comparison (UNITDSPR vs UBL, Radico Khaitan, etc.) with valuation and growth metrics? That would give you a sharper sector rotation view for your portfolio design.