ICICI Securities (I-Sec) has initiated coverage on United Breweries Ltd (UBL) with an ‘Add’ rating, setting a target price of ₹2,300. The brokerage firm anticipates strong revenue, EBITDA, and PAT growth over the next few years, driven by premium portfolio expansion and improved operational efficiency.
Investment Rationale
I-Sec expects United Breweries to deliver:
- Revenue CAGR of 13% over FY25–FY27.
- EBITDA growth of 29% over the same period.
- PAT growth of 34%, supported by higher premium segment sales and operational efficiencies.
The brokerage highlights United Breweries’ market leadership, emphasizing its superior distribution network and recent manufacturing capacity expansions.
Key Risks Identified
Despite the positive outlook, I-Sec has flagged potential risks, including:
- Regulatory changes affecting pricing and distribution.
- Raw material price inflation, which could impact margins.
- State taxation policies, which may influence volume growth.
Market Performance and Promoter Holdings
- Current Market Price: ₹2,127.85 per share.
- Market Capitalization: ₹56,627.65 crore.
- Promoter Holding: 70.83% as of March 31, 2025.
- FII Ownership: 6.92%, while DIIs hold 16.14%.
With premiumization trends driving growth in the alcoholic beverages sector, United Breweries is expected to leverage its strong brand portfolio and operational efficiencies to enhance profitability.
