Macquarie has reiterated its underperform call on United Spirits Limited (USL) with a target price of ₹1,250, highlighting risks from the recent tax hike in Maharashtra even as the company retained its growth targets. The brokerage said management remains cautiously optimistic about growth and expects greater clarity on the impact of the state tax changes to emerge during the festive season.
USL has reiterated its ambition of achieving double-digit growth in its prestige segment, supported by tailwinds in a few states, and also maintained its guidance of growing EBITDA ahead of sales growth. Macquarie noted that while these targets are encouraging, execution challenges remain, particularly given the near-term margin and demand headwinds in Maharashtra, one of the company’s key markets.
The brokerage’s cautious stance reflects a view that optimism on growth may take time to materialise in earnings, keeping upside limited in the near term.
Disclaimer: The views and recommendations made in this article are those of Macquarie. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
