Angel Broking - United Spirits - RU2QFY2013 - Neutral
Rajesh Desai
Dear All,
Forwarding you the Result Update on United Spirits for 2QFY2013 with a Neutral recommendation.
For 2QFY2013, United Spirits (USL) posted a standalone top-line growth of 24.0% yoy to `2,221cr (`1,791cr in 2QFY2012), aided by one time sale amounting to `315cr of bulk spirit stocks. Adjusted for the same, the sales growth stood at 6.4%, below our growth estimate of 8.9%. The PAT declined by 73.4% yoy due to higher interest costs (up by `26cr on a yoy basis), forex loss of `34cr (vs `39cr gain in 2QFY2013) with respect to loans to overseas subsidiaries and lower other income. We expect USL’s bottom-line to grow at a CAGR of 103.4% over FY2012-14E due to the lower interest costs on account of substantial reduction in debts post the UBH-Diageo deal. At the CMP, the stock is trading expensively at 38.9x FY2014 EPS; we maintain a Neutral view on the stock.
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With best regards,
Fundamental Advisory Desk
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CA. Rajesh Desai