Kotak Institutional Equities has reiterated its sell rating on United Breweries, setting a target price of ₹1,500 per share, which implies a downside of about 6% from the current market price of ₹1,598.50. The brokerage said the company’s short-term growth outlook remains weak, with beer affordability impacted in several states amid ongoing regulatory pressures.
In its note, Kotak Institutional Equities highlighted that sustained regulatory headwinds continue to weigh on both growth and profitability. While management execution on controllable levers has been steady, the brokerage cautioned that policy-related challenges and pricing constraints are likely to limit near-term volume acceleration.
That said, Kotak acknowledged that United Breweries’ premiumisation strategy remains intact, with management targeting consistent 25–30% plus volume growth in premium and above segments over time. The brokerage noted that this mix shift supports the long-term brand strategy, even as mass-market affordability issues persist.
On margins, Kotak expects expansion to be gradual, given input costs, pricing limitations and the uneven pace of state-level reforms. Overall, while execution and strategic priorities remain on track, the brokerage believes regulatory overhangs and muted near-term demand warrant a cautious stance on the stock at current valuations.
Disclaimer: This article is for informational purposes only. The views expressed are those of the brokerage cited and do not constitute investment advice or recommendations.
