1
Please refer to important disclosures at the end of this report
1
1
United Breweries Limited (UBL), the flagship company for the beer business
in the UB Group, is engaged in the manufacture, marketing and distribution
of beer. UBL maintained its share of 51% in the Indian beer market. UBL holds
the upper hand compared to other competitors, given the strong brand affinity
and various offerings across the spectrum of economy to premium beer. The
Kingfisher brand is synonymous with beer in India with a brand market share
more than double the nearest competitor. Given the strong brand recall and pull
in the market, UBL’s maintains a superior market share of more than 50% in as
many years. Near term concerns over state-wise ban of alcohol have resulted in
a valuation correction of the company. In contrast, the industry still being in a
nascent stage with per capita consumption of 1.9 litre per annum, provides
significant scope to grow as a change in lifestyle and increased disposable
income boost consumption of beer. UBL has reported a revenue & bottom-line
growth of 6% & 12% CAGR respectively over FY12-17. Further, the company’s
debt equity ratio has reduced from 0.66x in FY12 to 0.31x in FY17 and cash
flows has also improved from `188.48cr in FY12 to `544.05cr in FY17. Its
EBITDA margin has improved from ~12.75% in FY12 to ~14.45% in FY17. UBL
has reported RoE of 12.20% and is trading at EVEBITDA of 35.63x FY17
earnings. Hence Buy.
BUY
CMP `1140
0.8
Reuters Code
UBBW.NS
UBBL:IN
10
BSE Sensex
31,663
Nifty
9,930
Face Value (`)
Logistics
Market Cap (` cr)
3,163
52 Week High / Low
367/244.7
Avg. Daily Volume
12,653
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
United Breweries Ltd
Others | Breweries & Distilleries
Nov 07, 2017
2
United Breweries Ltd |Breweries & Distilleries
June 5, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement United Breweries Ltd
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)