United Spirits, Astral, Ramco Cements, Devyani International, Gujarat State Petronet, HG Infra Q4 Review

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HDFC Securities Institutional Equities

United Spirits - Realizations improve

United Spirits Ltd.’s Q4 FY25 profitability was ahead of our estimates, owing to higher-than-expected realization improvements (3.7/3.2% YoY realization growth in P&A/regular segments). Volume in the Prestige & Above (P&A) segment grew 9%, while the regular segment volume declined 2% YoY.

Management has indicated that margins will remain range-bound as it is targeting double-digit growth. We maintain our Add rating on United Spirits with a target price of Rs 1,650/share (55x its FY27 standalone EPS + Rs 123/sh for the RCB IPL team), with revenue/Ebitda/PAT CAGRs of 12/14/12% for FY25-FY28E.

In our view, Radico offers a much better risk-reward profile compared to United Spirits at similar valuations, given its much better earnings CAGR (35% FY25-28) versus United Spirits’ (14% CAGR) and its ability to fully participate in the premiumization story.

One needs to be mindful of the fact that United Spirits' margins for premium products are capped at 10%, if they are procured from the Diageo stable.

Astral - Healthy margins in both the segments

Astral Ltd.'s revenue rose 4% YoY (plumbing flat, adhesives and paints up 14% YoY). Ebitda too grew 4% YoY as Ebitda margin was flat at 18%. Adjusted profit after tax declined 1% YoY due to higher depreciation, interest, and lower other income.

Plumbing volume saw a marginal 1% growth owing to soft demand and declining resin prices. Adhesives and paints reported 14% revenue growth, 18% Ebitda growth. For FY26, the company projects low double-digit plumbing volume growth and 16-18% Ebitdam. It anticipates UK adhesive operations to improve in two-three quarters following implemented measures.

We maintain Add on Astral with a lower target price of Rs 1,450/share by valuing the company 50x its Mar27E EPS.

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