United Spirits Ltd (USL) witnessed a 3% jump in its share price after Citi upgraded the stock to a ‘Buy’ rating and raised its target price to ₹1,650. The brokerage firm cites strong earnings visibility, driven by favorable near-term trends and long-term structural growth opportunities.
Key Growth Drivers for United Spirits
Citi has outlined five major growth catalysts that support its bullish stance on USL:
- Premium Portfolio Expansion: Strong traction in high-margin Prestige and Bottled in India (BII) segments.
- Market Expansion: Increased penetration in Andhra Pradesh over the next three quarters.
- Regulatory Tailwinds: Policy changes in Uttar Pradesh that could lower working capital requirements and boost retail reach.
- Premiumisation Opportunity: Rising demand for premium spirits in India, aiding revenue growth.
- Operational Efficiency: Internal initiatives to enhance productivity and revenue management, mitigating commodity cost inflation.
Additionally, Citi highlights the possibility of regulatory easing in Delhi, which could further accelerate USL’s growth. The brokerage also points to strategic developments under newly appointed Managing Director and CEO, Mr. Praveen Someshwar, whose leadership is expected to drive operational efficiencies and innovation.
United Spirits’ shares opened at ₹1,420 and touched a high of ₹1,420.05 before slipping to a low of ₹1,390. The stock remains significantly below its 52-week high of ₹1,700 but well above the 52-week low of ₹1,097.35.
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