United Spirits (UNITDSPR)

FairStock Score: 60/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• ROE of 21.22% and ROCE of 26.50% indicate efficient capital use and a strong brand franchise.
• Debt/equity of just 0.05 with free cash flow of ₹833 Cr provides financial resilience.
• Profit growth of 22.68% and latest quarter net profit of ₹418 Cr show earnings momentum.
• Promoter holding of 56.68% aligns interests with minority shareholders.
• Piotroski F-Score of 8/9 reflects healthy financials and operational quality.

Concerns

• P/E of 57.09 and P/B of 12.41 are far above Graham Number of ₹243.49 and DCF value of ₹241.64, leaving a negative 467% margin of safety.
• Revenue growth of 9.29% and 5-year CAGR of 8.22% are moderate, making PEG of 5.30 very demanding.
• Negative EV/EBITDA of -20.62 is an unexplained red flag against the earnings quality.
• Dividend yield of just 0.87% offers little support in a downturn.

AI Analysis

When I study United Spirits, I see a fine business but a poor investment at this price. A 21.22% ROE and 26.50% ROCE with debt-to-equity of just 0.05 tells me management has a durable franchise and doesn't need much borrowing to compound. The company generated ₹833 crore of free cash flow. Promoter holding at 56.68% is encouraging; in India, skin in the game matters. The Piotroski F-Score of 8/9 confirms sound financial health. Profit grew 22.68%, and the latest quarter net profit of ₹418 crore on sales of ₹3,694 crore suggests momentum. However, sales growth of 9.29% and a five-year revenue CAGR of 8.22% are not exceptional for a company being valued like a high-growth wonder. The price of ₹1,382.30 puts the stock at 57.09 times earnings and 12.41 times book. Graham would ask: what are we paying, and what are we getting? The Graham Number is ₹243.49; the DCF intrinsic value is ₹241.64. That means margin of safety is negative 467%. A PEG of 5.30 reinforces overvaluation. The 0.87% dividend yield offers nothing while waiting. EV/EBITDA is negative at -20.62, which is odd and, unless explained, taints the earnings quality picture. This is a quality stalwart in the alcoholic beverages industry with strong brands and high returns on capital. But the price already reflects perfection. As Buffett, I'd say it is a wonderful business at too high a price. I would wait for a large margin of safety. If the price falls closer to a reasonable multiple or towards intrinsic value, my interest would rise. Until then, discipline wins.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer