North India Statesman
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The shares of United Spirits climbed more than 2% in intraday trading on Tuesday. This boom has come after the global brokerage house JP Morgan (overweight) rating the stock and its target price. This news has created a positive perception towards the company in the market.
At 11:35 am, the stocks of United Spirits on BSE rose 0.95% to trade at Rs 1,189.65, which also reached the Intrade High of Rs 1,213.90 at that time.
JP Morgan has upgraded the stock of United Spirits from ‘Neutral’ to rating ‘overweight’. Also, the brokerage house has increased its target price from Rs 1,020 to Rs 1,320, which shows a possible increase of 11.21% from the current market price.
JP Morgan has given the reason for this upgrade to the company’s revenue and gross margin “solid” and opportunities to invest in new high-development segments. According to brokerage, the company’s main premium (Premium) brands provided the margin expansion in FY 2024, while recovery in the middle-income segment has been slightly slow. However, he estimates that the sales pattern will improve from the second quarter of the financial year ending by March 2025.
Brokerage has said in its report that the rising cost of raw materials and the pressure of inflation have also been effectively managed, due to which a strong income growth is expected in the near future. He said that there is a possibility of sharp recovery in earnings in the financial year 2025, as well as a new phase of boom in income growth may begin, which is possible to increase by 15-20% annually by financial year 2025-27.
Analysts believe that United Spirits are in a strong position to increase their share in the market and promote income and profits through premium brands.
