Liquor stocks in focus; United Spirits, Pioneer Distilleries hit 52-wk high

United Breweries, Pioneer Distilleries, Globus Spirits, United Sprits and GM Breweries rallied up to 11 per cent on the BSE in intra-day trade on Wednesday

Shares of breweries & distilleries' companies were in focus on Wednesday with United Breweries (UBL), Pioneer Distilleries, Globus Spirits, United Sprits and GM Breweries ralling up to 11 per cent on the BSE in the intra-day trade on a faster volume recovery as multiple states started imposing lockdowns. In comparison, the S&P BSE Sensex was up 0.31 per cent at 55,967 points at 12:25 pm.

Among individual stocks, Pioneer Distilleries hit a fresh 52-week high of Rs 143.90, surging 11 per cent today on the back of heavy volumes. Meanwhile, UBL was up 7 per cent at Rs 1,509.60, and was trading close to its 52-week high level of Rs 1,537.65 touched on August 3, 2021.

United Spirits also soared 9 per cent to Rs 719.05 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 PLC. The company manufactures, sells and distributes premium brands such as Johnnie Walker, Black Dog, Black & White, Vat 69, Antiquity, Signature, Royal Challenge, McDowell’s No1, Smirnoff, and Captain Morgan.

The outlook for the Indian alcoholic beverages continues to remain positive due to 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 will be another major reason for the growth in the market, analysts say.

"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 tremendous opportunity to drive growth of Alcobev industry on the back of its 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 financial year 2020-21 annual report.

The company further said it looks on track to deliver on its medium-term goal of delivering double-digit topline growth and achieve mid-high teens Ebitda margins led by better pricing and cost optimization. The company’s move on focus towards the franchisee model in the Popular segment with successful implementation in 13 states had been well received and a further strategic review has been initiated.

That apart, Globus Spirits gained 5 per cent to quote at Rs 950 on the BSE. The stock had hit a record high of Rs 987.40 on August 16, 2021. In the past three months, it has zoomed nearly 200 per cent as against an 11.4 per cent rise in the S&P BSE Sensex. Currently, the stock is trading under the T group on the BSE. In the T2T segment, each trade has to result in delivery and no intra-day netting of positions is allowed.

On August 12, 2021, promoter Ram Bagh Facility Services LLP bought an additional 162,000 shares of Globus Spirits at Rs 862.05, while Long Term Equity Fund purchased 175,000 shares of the company at Rs 862.05 per share on NSE through bulk deals, exchange data shows. International Assets Reconstruction Company Private Limited sold 337,000 shares of Globus Spirits at Rs 862.05 per share, data shows.

Earlier, on August 11, International Assets Reconstruction Company Private Limited had sold 1.08 million shares of Globus Spirits at Rs 822.90 per share. Massachusetts Institute of Technology (900,000 shares) and 238 Plan Associates LLC (180,000 shares) had bought shares at price of Rs 822.90 per share vial bulk deals, data shows.