1 UBL share price target reports by brokerages below. See what is analyst's view on UBL share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
UBL reported robust FY18 and FY19 viz. PAT growth of 72/42% YoY respectively. Though FY18 partly reflects rebound from low base led by highway ban impact, FY19 is a fair reflection of what a well-run brewer is capable of provided externalities are stable-to-marginally positive. We like UBL owing to (a) strong volume growth potential of beer in India and (b) its superior execution. India is one of the few markets where beer and spirits consumptions are broadly equal vs. ~65:35 mix globally. Reiterate our ACCUMULATE rating with TP of Rs 1,476 @ 45x FY22E EPS (earlier Rs1,420 @ 50x Sep-21E EPS). Historically, UBL has traded at ~60x 1-yr forward earnings in trailing four years. We have reduced our target multiple to factor the regulatory uncertainties and weak short term prognosis.
Significantmissin2QFY20hasresultedin17.1%EPS impact for FY20. However, the impact is more moderate for FY21 at 2.3% cut to EPS as many factors affecting 1HFY20 were transient in nature. While we believe that long-term volume and earnings growth opportunity (FY19 PAT at only USD80m) is immense for India’s largest beer player with strong entry barriers in the form of distribution, brewery reach, scale and brands, valuations are fair at 47x FY21 EPS and 25.6x FY21 EV/EBITDA. Maintain Neutral.
We believe that the launch of craft beer and scaling up of non-alcoholic beverage business will support the topline growth along with aiding premiumisation. Company remains well positioned to deliver above industry earnings growth over FY20-22, as the raw material cost-related headwinds begin to come down (likely in 2HFY20 itself) coupled with operating leverage from strong topline growth. We have retained our Buy rating on UBBL with a target price (TP) of Rs1,465 (from Rs1,480 earlier) based on a EV/EBITDAmultiple of 25x on Sep’21 EBITDA.
Beer volumes have been growing at 8% CAGR in the past five years while UB market share has remained at ~52%. We expect volumes to grow at 8.5% CAGR in FY19-21. Being an underpenetrated segment (per capita ~2 litre consumption) and a youth centric status of ready to drink social drink, enables the sector to hold long term growth potential. Premiumisation, along with price hikes in existing portfolio and a favourable state mix, would also enable the company to negate the rising input costs. Incorporating the impact of recent tax rate cut, we upgrade our earnings estimates, thereby having a direct positive impact on cash flow generation. We have a BUY rating with a revised Target price of Rs1620 (~43x FY21 EPS).
We continue to maintain our Buy rating on UBL considering that alcoholic beverages (essentially beer) will be among the fast-growing segment in the consumption space. We have retained Buy rating on UBL with a TP of Rs1,610 (from Rs1,640 earlier) based on a P/E multiple of 48x, implying an upside of 18% from the current market price.
Cost Challenges Surpass Expectations. Valuation and recommendation: We continue to maintain our Buy rating on UBL considering that alcoholic beverages (essentially beer) will be among the fast-growing segment in the consumption space. After a slight revision to our earnings estimates for FY20 and FY21, we have retained Buy rating on UBL with a target price of Rs1,640 (from Rs1,620 earlier) based on a P/E multiple of 48x, implying an upside of 15% from the current market price.
"Premiumisation to drive earnings ahead." Valuation and Outlook: With a meagre 90000 outlets serving beer to an Indian population of 130 crore, the Indian beer industry is considered to be under penetrated (per capita consumption of ~2 litre). From a regulatory perspective, the worst appears to be over with fading of highway ban and stable state excise policies, which would create a favourable consumer pricing scenario and assist overall volume growth. In addition to the same, formalisation of the sector (corporation model) would benefit large players like UBL. However, due to recent run-up in the stock price, we change our recommendation to HOLD, valuing the company at a target price of | 1500 (~46x FY21 EPS).
Best-in-Class Performance. Valuation and recommendation: We continue to maintain our Buy rating on UBL considering that alcoholic beverages (essentially beer) will be among the fast-growing segment in the consumption space. In line with the improved performance, we have increased our estimates by around 4% for FY19/FY20. We also raised our target price on the stock to Rs1,590 (from Rs1,525 earlier) to factor in the upward revision of our estimates. Our target price multiple of 50x is consistent with the long-term trading average of the stock and the trading multiple assigned to other market leaders in the consumption space.
With a meagre 90000 outlets serving beer to an Indian population of 130 crore, the Indian beer industry is considered to be under penetrated (per capita consumption of ~2 litre). From a regulatory perspective, the worst appears to be over with fading away of highway ban and stable state excise policies that would create a favourable consumer pricing scenario and assist overall volume growth. In addition, formalisation of the sector (corporation model) would benefit large players like UBL. Also, UBL’s new initiatives like thrust towards premiumisation of product portfolio through new launches and introduction of brands from the Heineken portfolio and entry into non-alcoholic segment could provide further impetus to revenue growth. We introduce FY21 estimates and maintain BUY on the stock with a target price of Rs 1490 (valuing at ~48x FY21 EPS).
We raise our FY19/20 EPS estimate by 4.2%/2.9% to factor in the better-than-expected 3QFY19 performance. Long-term volume and earnings growth opportunity (FY18 PAT at USD 55m) is immense for India’s largest beer player with strong barriers to entry in the form of distribution, brewery reach, scale and brands. Operating environment appears to be improving at a healthy pace, market share gains continue and profitability is increasing, indicating healthy pace of earnings growth ahead. Election-related disruptions in the summer of 2018 could be a near-term dampener. The anti- trust issue remains an overhang, leading us to now value UBBL in line with peer multiples, instead of 10% premium earlier. Valuing the company at 28x Dec’20E EV/EBITDA, we derive a target price of INR1,660. Maintain Buy.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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