ICICI Direct has given Buy recommendation for United Breweries with a target price of Rs. 1450 in its research report issued on Apr 29, 2021
ICICI Direct’s research report on United Breweries
United Breweries’ (UBL) net revenues showed a sharp recovery and grew 8% YoY to Rs 1544 crore. Volumes grew 9% YoY, due to good growth in all key markets except Telangana, Delhi and Odisha. Gross margins grew 110 bps YoY to 52% due to a better state mix and price hikes, which along with control on operational costs led to EBITDA margin of 16.9% (up 760 bps YoY). Subsequently, absolute EBITDA was at Rs 261 crore (up 98% YoY). The company reported exceptional expense of Rs 62 crore due to recognition of impairment loss of Rs 44.5 crore at Bihar plant and impairment loss of Rs 17.8 crore on investment in subsidiary company. Subsequently, PAT came in at Rs 97 crore (unadjusted), as the operational performance was negated by exceptional expense.
We maintain BUY rating on the stock with a revised target price of Rs 1450 (earlier Rs 1490).