UNITDSPR - Investment Analysis

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

Investment Rating: 4.0

🥃 Fundamental Analysis of United Spirits Ltd (UNITDSPR)

✅ Strengths

Exceptional Return Metrics

ROCE: 28.7%

ROE: 21.4% — both are outstanding, indicating strong capital efficiency and profitability

Earnings Growth

PAT Qtr: ₹421 Cr vs ₹380 Cr — solid sequential growth

Qtr Profit Var: 61.0% YoY — strong momentum

EPS: ₹21.8 — healthy earnings base

Low Leverage

Debt-to-Equity: 0.06 — virtually debt-free, low financial risk

Brand Strength & Market Position

Backed by Diageo, global liquor giant

Premiumization strategy driving margins and growth

⚠️ Concerns

Valuation Stretch

P/E: 59.1 vs Industry PE: 32.9 — richly valued

PEG Ratio: 2.82 — growth priced in, but not excessive

Book Value: ₹111 vs Price: ₹1,324 — ~12x book, premium valuation

Technical Weakness

RSI: 32.0 — oversold zone, may signal short-term weakness

MACD: -33.8 — bearish momentum

Price below DMA 50 & 200 — trend reversal risk

Institutional Sentiment Mixed

FII Hold ↑ 0.07%

DII Hold ↓ 0.19% — cautious stance

Dividend Yield: 0.91% — modest, not attractive for income investors

52w Index: 12.5% — significant underperformance from 52-week high

📉 Ideal Entry Price Zone

Entry Zone: ₹1,270–₹1,310

Near recent low and RSI support

Offers better margin of safety and technical cushion

🧭 Long-Term Investment Outlook

United Spirits is a strong long-term candidate, especially for investors seeking exposure to premium consumer discretionary plays. Its high ROE/ROCE, low debt, and earnings momentum make it attractive despite valuation concerns.

Holding Period: 3–5 years

Ideal for long-term compounding as premium liquor consumption grows

Reassess if ROE drops below 15% or PEG exceeds 3.5

🚪 Exit Strategy (If Already Holding)

Partial Exit Zone: ₹1,650–₹1,700

Near 52-week high and valuation ceiling

Full Exit

If ROE drops below 15% for 2+ quarters

If PEG ratio rises above 4.0 without earnings growth

If price breaks below ₹1,250 and fails to recover

Reinvest: On dips near ₹1,270 if fundamentals remain strong

Would you like a side-by-side comparison with Radico Khaitan or United Breweries to identify the best long-term alcohol sector play?

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