Mumbai: The likely initial public offering of the Indian arm of Danish brewer Carlsberg could boost the share valuations of United Breweries, which owns the Kingfisher beer brand. United Breweries, which has market share of 51 per cent in the beer segment in India, is currently valued at Rs 33,993 crore. Carlsberg with a market share of 17 per cent is likely to be valued at least Rs 10,000 crore in the IPO, said bankers.
Motilal Oswal Securities said UBL should trade at a valuation of Rs 39,200 crore. This could take the UBL stock up to Rs 1,480. The stock, which has rallied 20 per cent so far this year as against the Sensexs gain of 5.3 per cent, rose 1.16 per cent to close at Rs 1,287 on Monday.
“The IPO news of Carlsberg has a positive sentimental impact on UBL stock, but how much it boosts the UBL valuation depends on the valuation of Carlsberg,” said Gaurav Dua, head of research, at Sharekhan.
UBL posted its 9th consecutive quarter of market share gain in January-March. The company reached 52 per cent market share for financial year ended March 31, 2018. Market share grew both in strong and mild beer by over 200 basis points for the year. Kingfisher strong volumes grew 7 per cent in FY18 and crossed 100 million cases. The management guided for a highsingle-digit volume growth for UBL in FY 2019, said analysts “Improving volume growth trends, easing competition and benign input cost environment place UBL favorably to gain share and deliver strong earnings growth” said Ashit Desai, analyst, Emkay Global.
Technical analysts are forecasting continued strength in the stock which has rallied 11 per cent in the last nine trading sessions “This overall price action has been captured in a well-defined upward sloping channel formation, signifying positive price structure. On the momentum oscillator front, weekly MACD has been inching upward after rebounding from buying zone, indicating acceleration of upward momentum” said Dharmesh Shah, head-technical, ICICI Securities.
“We expect, stock to continue to trade with a positive bias and gradually head towards upper band of aforementioned channel formation placed around 1,440 levels,” he added.