BoFA Securities has reiterated its buy rating on United Spirits Ltd (USL) with a target price of ₹1,630, arguing that the recent stock pullback and below-average valuations are overdone given the company’s growth outlook and resilient positioning.
The brokerage said that while the Maharashtra duty hike has been factored into its estimates, USL’s favourable competitive positioning and potential tailwinds in smaller states could mitigate some of the downside. It forecasts double-digit revenue growth and mid-teens earnings CAGR, supported by premiumisation trends and operational efficiencies.
USL is also expected to strengthen reserves and maintain a healthy dividend payout ratio of 50–70%, which BoFA said provides additional support for shareholder returns. The brokerage concluded that the valuation reset offers an attractive entry point for investors with a medium-term horizon.
Disclaimer: The views and recommendations made in this article are those of BoFA Securities. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
