United Breweries Ltd, incorporated in the year 1999, is a Large Cap company with a market cap of Rs 31547.50 Crore, operating in Beverages – Alcoholic sector.
United Breweries’ key Products/Revenue Segments include Other Operating Revenue, Others, Scrap, Non-Alcoholic Beverages and Royalty Income for the year ending 31-Mar-2020.
Investment Rationale
According to Motilal Oswal, if the lockdowns are extended and/or implemented in other states, the impact could be much higher as Q1 (the summer season) has historically contributed 35–45 per cent to the company’s full year EBITDA.
Despite assuming recovery in FY23 and the second highest operating margins in the company’s history, valuations are rich at ~63x FY23E EPS – despite flat EPS over FY19–23E and RoE in the early teens, said Motilal Oswal. Progress on CCI investigations spells another overhang at an already challenging time, it added. Hence, Motilal Oswal maintains sell, with a target price of Rs 960, calculated at 24x FY23E EV/EBITDA.
Financials
For the quarter ended 31-03-2021, the company has reported a Consolidated Total Income of Rs 1556.30 Crore, up 20.11 per cent from last quarter’s Total Income of Rs 1295.77 Crore and up 9.15 per cent from last year same quarter’s Total Income of Rs 1425.87 Crore. Company has reported net profit after tax of Rs 97.53 Crore in latest quarter.
