Home / Business and Economy / Jefferies boosts U. Spirits stock: 20% upside seen
Jefferies boosts U. Spirits stock: 20% upside seen
2 Nov
Summary
- Jefferies upgrades United Spirits to 'Buy' with a 20% target price increase.
- Nomura maintains 'Buy' on United Spirits, raising target by 26%.
- Growth driven by Smirnoff, J&B Scotch relaunch, and improving volumes.
Global investment bank Jefferies has upgraded its rating on United Spirits to "Buy" from "Hold," along with a nearly 4% increase in its target price to Rs 1,620. This suggests a potential 20% stock appreciation. Japanese brokerage Nomura has also maintained its "Buy" call, raising its target price by 6% to Rs 1,700, indicating a 26% upside.
Both financial institutions attribute their positive outlook to anticipated volume growth, particularly in the second half of FY27. Jefferies forecasts a 9% volume increase for prestige and above segments, contrasting with a 1% decline in the first half. The company's management is confident in achieving double-digit value growth for FY27, supported by a favorable base, reduced regulatory hurdles, and the successful relaunch of McDowell's.
The FTA between the UK and India has reduced duties on scotch, facilitating the relaunch of J&B across key markets. Similarly, McDowell's renovation has reached a significant portion of markets, with packaging enhancements underway. Jefferies projects Smirnoff's net sales value to exceed Rs 1,000 crore in FY28, bolstered by new flavors and the introduction of Smirnoff Ice.
Nomura anticipates a volume rebound as prestige and above growth returns to double digits in the latter half of the year, coinciding with peak festive demand. The relaunch of J&B whiskey is also seen as a significant growth catalyst. Smirnoff continues its strong performance, projected to reach Rs 1,000 crore in net sales value for FY27.
