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Shares of United Spirits have rallied 9% to Rs 3,941 on National Stock Exchange (NSE) on back of heavy volumes.
The stock opened at Rs 3,618 and hit a record high of Rs 4,048 on NSE so far. Till 1357 hours, a combined 782,222 shares have already changed hands on the counter against an average sub 250,000 shares that were traded daily in past two weeks on NSE and BSE.
Since February 20, the stock surged 20% from Rs 3,310 after United Spirits said that the High Court of Karnataka, Bengaluru, had sanctioned the Scheme of Arrangement to hive off its distillery unit in Chennai to Enrica Enterprises Pvt Ltd. The company has earlier received nod from the Competition Commission of India and the Madras High Court to the Scheme, according to reports. The CNX Nifty gained 1.7% during the same period.
Meanwhile, Gautam Duggad and Manish Poddar analysts at Motilal Oswal Securities recommended a ‘Buy’ rating on the stock with a target price of Rs 4,250.
“Favorable demographics (50% population <25 years of age), low per capita consumption (0.9 litre per annum), rising middle class, growing disposable income, increasing social acceptance of drinking, and rising consumption of Indian Make Foreign Liquor (IMFL) among women are the key long-term IMFL growth drivers. With 60%+ of the market in the hands of “value-focused” multi-national companies (as against the volume focus of erstwhile United Spirits management) we expect the industry profitability to improve,” analysts said in a research report dated January 24, 2015.
The stock opened at Rs 3,618 and hit a record high of Rs 4,048 on NSE so far. Till 1357 hours, a combined 782,222 shares have already changed hands on the counter against an average sub 250,000 shares that were traded daily in past two weeks on NSE and BSE.
Since February 20, the stock surged 20% from Rs 3,310 after United Spirits said that the High Court of Karnataka, Bengaluru, had sanctioned the Scheme of Arrangement to hive off its distillery unit in Chennai to Enrica Enterprises Pvt Ltd. The company has earlier received nod from the Competition Commission of India and the Madras High Court to the Scheme, according to reports. The CNX Nifty gained 1.7% during the same period.
Meanwhile, Gautam Duggad and Manish Poddar analysts at Motilal Oswal Securities recommended a ‘Buy’ rating on the stock with a target price of Rs 4,250.
“Favorable demographics (50% population <25 years of age), low per capita consumption (0.9 litre per annum), rising middle class, growing disposable income, increasing social acceptance of drinking, and rising consumption of Indian Make Foreign Liquor (IMFL) among women are the key long-term IMFL growth drivers. With 60%+ of the market in the hands of “value-focused” multi-national companies (as against the volume focus of erstwhile United Spirits management) we expect the industry profitability to improve,” analysts said in a research report dated January 24, 2015.
