Fact based stock research
United Spirits (NSEI:MCDOWELL-N)

INE854D01024

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

United Spirits stock research in summary

diageoindia.com

ANALYSIS: With an Obermatt Combined Rank of 58 (better than 58% compared with investment alternatives), United Spirits (Distillers & Vintners, India) shares have above-average financial characteristics compared with similar stocks. Shares of United Spirits are low in value (priced high) with a consolidated Value Rank of 5 (worse than 95% of alternatives). But they show above-average growth (Growth Rank of 71) and are safely financed (Safety Rank of 86, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 58, is a buy recommendation based on United Spirits's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company United Spirits exhibits low value (Obermatt Value Rank of 5), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 71). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 86) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	5
Growth Rank	71
Safety Rank	86
Combined Rank	58

Country	India
Industry	Distillers & Vintners
Index	Good Governace Growth Markets
Size class	X-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: United Spirits

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	15	1	5	5
GROWTH
GROWTH	55	95	81	71
SAFETY
SAFETY	21	25	69	86
SENTIMENT
SENTIMENT	n/a	23	17	^new
360° VIEW
360° VIEW	n/a	13	29	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Mar-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better United Spirits is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	15	1	5	5
GROWTH
GROWTH	55	95	81	71
SAFETY
SAFETY	21	25	69	86
COMBINED
COMBINED	30	29	57	58

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of United Spirits the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 5 (worse than 95% compared with alternatives), United Spirits shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for United Spirits. Price-to-Sales is 5 which means that the stock price compared with what market professionals expect for future profits is higher than 95% of comparable companies, indicating a low value concerning United Spirits's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 17, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of United Spirits. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 5 and Dividend Yield, which is lower than 91% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 5, is a sell recommendation based on United Spirits's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for United Spirits? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as United Spirits? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. United Spirits may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	53	5	7	5
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	32	5	9	5
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	12	12	12	17
DIVIDEND YIELD
DIVIDEND YIELD	1	1	9	9
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	15	1	5	5

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of United Spirits; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 71 (better than 71% compared with alternatives), United Spirits shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for United Spirits. Sales Growth has a rank of 84 which means that currently professionals expect the company to grow more than 84% of its competitors. Stock Returns are also above average with a rank of 81. But Capital Growth has only a rank of 41, which means that currently professionals expect the company to grow its invested capital less than 59% of its competitors. Profit Growth is also low, with a rank of only 43, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 71, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 81% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	25	88	82	84
PROFIT GROWTH
PROFIT GROWTH	n/a	88	79	43
CAPITAL GROWTH
CAPITAL GROWTH	n/a	17	15	41
STOCK RETURNS
STOCK RETURNS	80	93	81	81
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	55	95	81	71

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of United Spirits.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 86 (better than 86% compared with alternatives) for 2024, the company United Spirits has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of United Spirits is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for United Spirits. Leverage is at a rank of 90, meaning the company has a below-average debt-to-equity ratio. It has less debt than 90% of its competitors. Liquidity is also good at a rank of 81, meaning the company generates more profit to service its debt than 81% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 35, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 65% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 86 (better than 86% compared with alternatives), United Spirits has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for United Spirits. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with United Spirits and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	46	70	94	90
REFINANCING
REFINANCING	36	21	35	35
LIQUIDITY
LIQUIDITY	53	26	58	81
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	21	25	69	86

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of United Spirits and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	32	27	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	63	36	^new
MARKET PULSE
MARKET PULSE	n/a	9	20	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	23	17	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for United Spirits.
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