United Breweries, United Spirits and others gain as Gujarat allows liquor consumption in GIFT City
The step has been strongly condemned by the opposition Congress and the Aam Aadmi Party, as the parties see the decision as a backdoor to the removal of prohibition in the state, as stated in the PTI report.
Most liquor stocks on Tuesday (December 26) gained in trade after the Gujarat government allowed liquor consumption in the GIFT City campus.
Names such as Tilaknagar Industries (up 2 per cent), GM Breweries (up 3 per cent), United Breweries (up 1.75 per cent), and United Spirits (up 1.38 per cent) among others, traded with gains, while a few others, including Piccadily Agro (down 0.5 per cent) and Som Distilleries (down 0.27 per cent) were trading in the red.
On Friday, the Gujarat state government, in a radical shift, announced a new policy allowing alcohol consumption at hotels, restaurants, and clubs offering ‘wine and dine’ within the International Finance Tec-City (GIFT City) near the state capital Gandhinagar.
The step has been strongly condemned by the opposition Congress and the Aam Aadmi Party, as the parties see the decision as a backdoor to the removal of prohibition in the state, as stated in the PTI report.
Gujarat is among a few states where liquor consumption is illegal, and the state has been stringent in implementing the ban on alcohol consumption while forgoing revenue taxes worth several thousand crore rupees annually as prohibition has created a parallel bootlegging industry owing to a nexus between police and bootleggers, according to the report.
Earlier in its December 13 report, ICICI Securities had maintained its buy rating on United Spirits with a one-year target of Rs 1,250.
The company has been able to guide for 15% + EBITDA margins in FY24 despite continued volatility along the gross margins, noted the brokerage.
The brokerage estimates Revenues/EBITDA/PAT at the company to grow at 9%/22%/11% FY23–25 CAGR. Return ratios are also expected to reach 24% levels (return on invested capital (ROIC) even higher).
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11:23 AM IST