Goldman Sachs has also initiated a ‘Buy’ rating on United Spirits Limited (USL), with a target price of Rs 1650. The brokerage highlights USL’s strategic positioning to benefit from the premiumisation trend in India’s liquor market. The Scotch whisky segment, the fastest-growing in the whisky category, has expanded over four times within the Indian whisky market between FY18 and FY23, and USL is poised to leverage this growth.
A potential tailwind for USL could be the reduction in Scotch import tariffs, which may be achieved if the India-UK trade deal concludes within the next 12 months. Additionally, USL is diversifying its portfolio by launching premium brands in tequila and gin, and extending its largest whisky brand into gin, vodka, and rum. Goldman Sachs estimates USL’s earnings per share (EPS) to grow at a CAGR of 14% over FY24-FY27, driven by cost-efficiency initiatives and operating leverage. The brokerage sees USL as well-positioned to capture growth in the premium alcohol segment.
