Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Bottom-Up

<ul>
<li>In an attempt to cover more companies, we shift gears from individual companies to sectoral analysis, focusing on alcoholic beverages in this insight.</li>
<li>Companies in focus are <a href="https://www.smartkarma.com/entities/united-spirits-ltd" target="_blank" data-smartkarma-citation="entities:5146:1" rel="noopener">United Spirits (UNSP IN)</a>, <a href="https://www.smartkarma.com/entities/radico-khaitan-ltd" target="_blank" data-smartkarma-citation="entities:20842:1" rel="noopener">Radico Khaitan (RDCK IN)</a> , <a href="https://www.smartkarma.com/entities/sula-vineyards-ltd" target="_blank" data-smartkarma-citation="entities:36206:1" rel="noopener">Sula Vineyards (SULA IN)</a> &amp; <a href="https://www.smartkarma.com/entities/united-breweries-ltd" target="_blank" data-smartkarma-citation="entities:18080:1" rel="noopener">United Breweries (UBBL IN)</a>. </li>
<li>UNSP remains the best among the pack in terms of earnings quality, and SULA occupies the other extreme. RDCK is chasing growth, and UBBL is facing challenges. </li>
</ul>


In an attempt to cover more companies, we shift gears from individual companies to sectoral analysis, focusing on alcoholic beverages in this insight.
Companies in focus are United Spirits (UNSP IN), Radico Khaitan (RDCK IN) , Sula Vineyards (SULA IN) &amp; United Breweries (UBBL IN). 
UNSP remains the best among the pack in terms of earnings quality, and SULA occupies the other extreme. RDCK is chasing growth, and UBBL is facing challenges. 


Narrative and Numbers | Alcoholic Beverages | FY24

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

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Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>UNSP’s 1QFY25 print was above our estimates; as mid-single-digit volume growth in the P&amp;A surprised us positively despite elections-related restrictions</li><li>UNSP is targeting low teen revenue growth in the P&amp;A segment in FY25, with a mix of 40/60% skewed towards volume/price respectively</li><li>We believe the low teen revenue growth in the P&amp;A segment might be difficult to come by in FY25, as the last three years have seen very good realisation growth (the P&amp;A segment saw a realisation CAGR of 8% over FY21-24) on the back of price increases given by state governments and increased salience of premium products</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

UNSP’s 1QFY25 print was above our estimates; as mid-single-digit volume growth in the P&amp;A surprised us positively despite elections-related restrictionsUNSP is targeting low teen revenue growth in the P&amp;A segment in FY25, with a mix of 40/60% skewed towards volume/price respectivelyWe believe the low teen revenue growth in the P&amp;A segment might be difficult to come by in FY25, as the last three years have seen very good realisation growth (the P&amp;A segment saw a realisation CAGR of 8% over FY21-24) on the back of price increases given by state governments and increased salience of premium productsContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

United Spirits (Q1FY25 Results Review): Decent Operating Performance. Maintain ADD

Investment Research - Asia Consumer Sector, Investory

Devi Subhakesan

Investment Research - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/allied-blenders-distillers" target="_blank" data-smartkarma-citation="entities:36090:1" rel="noopener">Allied Blenders &amp; Distillers</a>' recent IPO spotlighted India's alcoholic beverage sector, which bucks global trends with strong volume and value growth.</li>
<li>India is the third largest alcoholic beverage market globally, and the second largest for spirits. It is projected to grow at a CAGR of more than 10% over the near-term.</li>
<li>Incumbent players in this highly regulated sector can benefit from strong market moats and evolving growth opportunities if they can effectively navigate the highly regulated business  environment.</li>
</ul>



Allied Blenders &amp; Distillers' recent IPO spotlighted India's alcoholic beverage sector, which bucks global trends with strong volume and value growth.
India is the third largest alcoholic beverage market globally, and the second largest for spirits. It is projected to grow at a CAGR of more than 10% over the near-term.
Incumbent players in this highly regulated sector can benefit from strong market moats and evolving growth opportunities if they can effectively navigate the highly regulated business  environment.


India Alcoholic Beverages: Growing in Pints And Quarts. IPO Adds a Valuation Kick

<ul><li>UNSP 4QFY24 print was broadly in line with our estimates, however, volume growth in the regular segment surprised us positively</li><li>Volume growth in the Prestige and above segment remained in the low single digits for the third consecutive quarter, management attributed the below-par performance to an unfavourable base and economic slowdown</li><li>UNSP is targeting low teen revenue growth in the P&amp;A segment in FY25, with a mix of 40/60% skewed towards volume/price respectively</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

UNSP 4QFY24 print was broadly in line with our estimates, however, volume growth in the regular segment surprised us positivelyVolume growth in the Prestige and above segment remained in the low single digits for the third consecutive quarter, management attributed the below-par performance to an unfavourable base and economic slowdownUNSP is targeting low teen revenue growth in the P&amp;A segment in FY25, with a mix of 40/60% skewed towards volume/price respectivelyContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

United Spirits (4QFY24): Moderating Growth Outlook. Maintain ADD

Indian Accounting Research Analyst, Trudence Capital Advisors

Nitin Mangal

Indian Accounting Research Analyst

Thematic (Sector/Industry)

<ul>
<li>There is a strong probability that the proposed Free Trade Agreement (FTA) between India and the UK might be closed next month.</li>
<li>FTA could be a game changer for the Indian Liquor Industry with a possibility of sharp reduction in customs duty. Additionally, it can open new export avenues for domestic companies.</li>
<li>Beneficiaries may include <a href="https://www.smartkarma.com/entities/united-spirits-ltd" target="_blank" data-smartkarma-citation="entities:5146:1" rel="noopener">United Spirits (UNSP IN)</a> and <a href="https://www.smartkarma.com/entities/pernod-ricard-sa" target="_blank" data-smartkarma-citation="entities:21533:1" rel="noopener">Pernod Ricard Sa (RI FP)</a>, and also Indian companies like <a href="https://www.smartkarma.com/entities/globus-spirits-ltd" target="_blank" data-smartkarma-citation="entities:15728:1" rel="noopener">Globus Spirits (GBSL IN)</a> and <a href="https://www.smartkarma.com/entities/radico-khaitan-ltd" target="_blank" data-smartkarma-citation="entities:20842:1" rel="noopener">Radico Khaitan (RDCK IN)</a>
</li>
</ul>


There is a strong probability that the proposed Free Trade Agreement (FTA) between India and the UK might be closed next month.
FTA could be a game changer for the Indian Liquor Industry with a possibility of sharp reduction in customs duty. Additionally, it can open new export avenues for domestic companies.
Beneficiaries may include United Spirits (UNSP IN) and Pernod Ricard Sa (RI FP), and also Indian companies like Globus Spirits (GBSL IN) and Radico Khaitan (RDCK IN)



India-UK FTA: Can Be Game-Changer for Liquor Industry

India

United Spirits Ltd. manufactures and distributes alcoholic beverages. The Company provides a variety of alcohols and spirits, including whiskey, brandy, and rum. United Spirits also manufactures indian-made foreign liquor brands. United Spirits serves customers worldwide.

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United Spirits (UNSP IN)

Narrative and Numbers | Alcoholic Beverages | FY24

United Spirits leads in earnings quality while Sula Vineyards lags behind, Radico Khaitan pursues growth, and United Breweries encounters challenges.

Pranav Bhavsar

United Spirits (Q1FY25 Results Review): Decent Operating Performance. Maintain ADD

UNSP’s 1QFY25 print was above our estimates; as mid-single-digit volume growth in the P&A surprised us positively despite elections-related...

HDFC Securities

India Alcoholic Beverages: Growing in Pints And Quarts. IPO Adds a Valuation Kick

India's alcoholic beverage sector has delivered strong volume and value growth as well as attractive shareholder returns. Know the fundamentals and...

Devi Subhakesan

United Spirits (4QFY24): Moderating Growth Outlook. Maintain ADD

UNSP 4QFY24 print was broadly in line with our estimates, however, volume growth in the regular segment surprised us positively

HDFC Securities

India-UK FTA: Can Be Game-Changer for Liquor Industry

The FTA can be a game changer for the Indian Liquor Industry, as customs duty might be slashed sharply. It can open up new avenues for exports for...

Nitin Mangal

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