Liquor stocks in high spirits on volume recovery
Shares of brewery and distillery companies were in focus on Wednesday with United Breweries (UBL), Pioneer Distilleries, Globus Spirits, United Sprits, and GM Breweries rallying up to 13 per cent on the BSE in intraday trade on a faster volume recovery after multiple states eased or ended lockdowns. In comparison, the S&P BSE Sensex ended 0.29 per cent down at 55,629.49.
Among individual stocks, Pioneer Distilleries hit a fresh 52-week high of ~147.25, surging 13.27 per cent on the back of heavy volumes. UBL jumped nearly 6 per cent to Rs 1,490. For most of the day, it traded close to the 52-week high level of ~1,537.65, touched on August 3, 2021.
United Spirits also soared 9.76 per cent to ~724.60 and hit a 52-week high on the BSE, supported by a seven-fold jump in trading volumes. United Spirits is one of the country’s leading beverage alcohol companies and a subsidiary of global leader Diageo.
The outlook for Indian alcoholic beverages continues to remain positive because of favorable demographics, expanding middle class, rising disposable income levels, greater preference for premium food and drink experiences, and greater acceptance of alcoholic beverages in social circles. Increased consumption of liquor in rural areas shall be another major reason for growth, according to analysts.
“Although the average per adult intake of alcohol is considerably low in India when compared to other countries, such as the United States, drinkers among young Indians are more prevalent. This provides a tremendous opportunity to drive growth of the alcohol industry on the back of the rising working-age population. It is expected that per capita consumption will increase with changes in lifestyle and aspiration of the population," United Spirits said in the financial year 202021 annual report.
The company further said it looks on track to deliver on its medium-term goal of delivering double-digit top-line growth and achieve mid-high teens Ebitda margin, led by better pricing and cost optimisation.