AlcoBev Q3 Results Preview - Base Supports YoY Growth, QoQ Weak: Dolat Capital

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Dolat Capital Report.We recently downgraded Indian alcobev companies (demand blip plus raw material peril = earnings risk) on account of risk of moderation in volume growth, raw material prices continues to remain elevated and the recent run-up in stock prices. Raw material (both extra neutral alcohol and glass bottles) were expected of being stable/soft in FY24. On the contrary ENA has been on uptick and unlikely to decline in six- nine months in our view. This is likely to delay the margin recovery/impact margins in the near-term. Share prices of United Spirits Ltd./ Radico Khaitan Ltd./United Breweries Ltd. have moved up by ~20/36/16% in trailing six months versus 15% by Nifty. Premiumisation is a longer-term alcobev industry trend and thus we are not calling it out a structural risk to prestige and above category demand but more of short-term blip phenomenon with higher raw material prices. Hence, we have not downgraded our target multiple viz. 50 times FY26E earnings per share for all three names. That said time correction seems inevitable, price correction likely on account of high earnings expectations and rich valuations leaving limited room to err. Our preference in pecking order is Radico Khaitan, United Spirits and United Breweries..Click on the attachment to read the full report:.IT Services Q3 Results Preview - Furloughs, Lower Discretionary Spend To Impact Outlook: IDBI Capital.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

AlcoBev Q3 Results Preview - Base Supports YoY Growth, QoQ Weak: Dolat Capital

In seasonally strong Q3 for Indian made foreign liquor companies, demand is expected to be a tad soft especially for United Spirits

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