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Friday, October 28, 2011

United Breweries (Holdings) Ltd:-Buy/sell/growth prospects and recommendation,news and results,target price and analysis,view and outlook,multibagger

Scripscan:United Breweries (Holdings) Ltd
BSE code:507458

Story:United Breweries Holdings is a very interesting play. This is a flagship company of the UB Group and all their major investments are held in this company. But the real problem to the company has started with their investments made in Kingfisher Airlines. If you see their total exposure of close to about Rs 9,000 crore is into the Kingfisher Airlines and whatever funding which has come to the Kingfisher Airlines have all been routed through this company. Sometimes I feel that probably this could be an excellent proxy play that those who are buying for Kingfisher Airlines if they can look to buy UB Holdings.If you go by their loans and advances, they have the borrowings, they have given that kind of money to Kingfisher, but if you go their listed portfolio they have a stock of close to Rs 4,000 crore plus of which Rs 3,000 stocks are held in United Spirits and United Breweries; the flagship company of the group. United Breweries is holding close to about Rs 2,300-2,400 crore and United Spirits about Rs 800-900 crore. So, if you take these core holdings and the kind of beatings, which has seen in Kingfisher Airlines and it seems that management has now turned serious. I think that United Breweries looks to have bottomed out. The share is now ruling at a book value of 0.4.If you go by the net worth it is about Rs 1,600 plus and the present market cap is close to about Rs 700 crore. But the whole problem to the company is happening largely because of Kingfisher Airlines and once you see the indications or maybe the fund infusion start happening by the promoters in their personal capacity in Kingfisher Airlines this company is going to get relieved to the extent amount infused into the Kingfisher Airlines. And the kind of noises that Rs 2,000-3,000 crore is being planned by Kingfisher Airlines which will get raised either from the overseas investors or by the promoters is going to help this company.Those who are keeping a view of maybe about a year or so this seems to be a very good play. On the downsides, I don’t think that share can really fall below Rs 90, because as I said all the adverse news has already got factored into the price. 52 week high used to be about Rs 330-340, so downside risk is very low maybe at about Rs 90. But if somebody can keep a view of maybe one to two year share has potential to move to Rs 200-300 in next one to two years time. So this is a bit long-term play and could be seen more as a proxy for Kingfisher Airlines as well.

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