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Investing.com - BofA Securities has raised its price target on United Breweries (NSE:UBBW) Ltd. (UBBL:IN) to INR1,915.00 from INR1,860.00 while maintaining an Underperform rating on the stock.
The research firm views United Breweries’ business as being in transition, with the company implementing multiple strategies to increase beer penetration in the Indian market and compete with smaller peers in the premium segment.
These initiatives include distribution enhancement, visicooler deployment, product innovation, targeted brand building, capacity expansion, and backward integration efforts such as collaborating with barley farmers and improving glass bottle return rates.
United Breweries is also engaging in advocacy with regulators on issues related to pricing, taxation, route-to-market, and operations, according to BofA Securities.
Despite these efforts, the research firm notes that the company’s growth journey is not linear due to continuous roadblocks, with the target of achieving double-digit EBIT margins appearing to be delayed, as reflected in recent quarterly results.
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