United Spirits - March 2013 Results Preview - Motilal Oswal

- We expect United Spirits (UNSP) to post 8.5% revenue growth to INR20.2b in 4QFY13E, led by 4-5% volume growth.

- Trade issues in Tamil Nadu will continue to impact underlying volume growth.

- The premium segment would grow at a faster pace aided by up-trading. Price hikes would also contribute to realization growth.

- Expect margin expansion of 200bp (poor base) to 11.6%.

- Expect UNSP to report ~INR600m PBT from operations, against a loss of INR77m in the base quarter.

- PAT is estimated at INR718m, against INR79m in 4QFY12.

- Andhra Pradesh has announced a price increase, which would provide support to margins in 4Q.

- Maharashtra, a key UNSP market, recently increased excise duty on IMFL by 25%.

- The stock trades at 33.6x FY14E EPS and 23.5x FY15E EPS. Buy.

Source : Equity Bulls

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