Shares of United Spirits Ltd (USL) jumped 3% after Citi reaffirmed its Buy rating on the stock with a target price of ₹1,800. As of 10:43 AM, the shares were trading 2.87% higher at Rs 1,629.50.
Citi’s report acknowledged that the near-term demand environment remains challenging due to ongoing market uncertainties. However, the brokerage expects premiumization trends to bounce back over the next two to three quarters, driven by shifting consumer preferences towards higher-end products.
As per Citi’s report, a significant boost is anticipated from the India-UK Free Trade Agreement, which the management believes will enhance export opportunities and support premiumization in key markets. This trade deal is seen as a catalyst for expanding United Spirits’ international footprint and strengthening its brand presence abroad.
On the regulatory front, Citi noted improvements in the policy environment that could benefit the overall alcoholic beverages sector. A more favorable regulatory framework is expected to create a supportive medium-term outlook, encouraging investment and growth in the industry.
Despite the evolving demand conditions, United Spirits is committed to maintaining its EBITDA margins at current levels for the next two to three years. This focus on margin stability underscores the company’s efforts to optimize costs and enhance operational efficiency.
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