Buy United Spirits Ltd For Target Rs. 1210-1325 - Religare Broking Ltd
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TECHNICAL OUTLOOK
MCDOWELL-N registered a decisive breakout from the consolidation phase in July 2023, which continued for over one and a half years.
It has been gradually inching higher since then, finding support at its short term moving average i.e. 20 WEMA.
Following price action and positioning of the momentum indicator, we expect the stock to maintain the prevailing tone. Traders can accumulate in the mentioned range.
FORWARD PE BAND (x)
TECHNICAL CHART : WEEKLY
INVESTMENT RATIONAL
United Spirits is promoted by global leader Diageo PLC which is involved in manufacturing, sale and distribution of alcohol and has a comprehensive portfolio of ~80+ brands of spirits. It has sold its non-core brands over the last few years with a view to focus on its premium P&A segment which now accounts for ~83.2% of its overall volume resulting in healthy realizations.
The softening of input cost has enabled the company to post healthy margins in the recent quarters. It intends to achieve ~15% EBITDA margin in the medium term while aiming at ~16%/16.5% in the long term.
It is virtually a debt free company and has started distributing dividends to its shareholders while it also maintains healthy return ratios making it an attractive proposition in its segment.
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SEBI Registration number is INZ000174330
