Globus Spirits, UBL in Radico Khaitan, why are alcohol stocks soaring?

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Stock exchange today: Due to good figures for the second quarter of fiscal year 2021-22 after fiscal measures announced by some state governments and grain prices remaining the same, alcohol inventories are on the rise today as the market has turned bullish on these stocks pending debt reduction from liquor companies. The share price of liquor company Radico Khaitan climbed around 4%, United Spirits stock rose more than 3% while that of Globus Spirits jumped almost 4% in the market. intraday trading session.

The event discount is also playing its part, experts say, as sales of premium brands from various alcohol companies have also increased due to the fast approaching festival season and recent Covid-19 restrictions. They said that you can buy stocks like United Breweries, United Spirits or McDowell and Radico Khaitan in the short or medium term.

Speaking on the main reasons for the skyrocketing alcohol stocks; Avinash Gorakshkar, head of research at Profitmart Securities, said: “Alcohol stocks are on the rise due to recent tax measures announced by some state governments, including Uttar Pradesh, the world’s largest consumer of alcohol. in India. Other than that, various alcohol companies are reporting an increase in their premium brands due to recent Covid-19 restrictions which are expected to result in a high number of these companies in the second quarter. . “He said grain prices have stayed more or less the same, so over the coming season liquor companies are expected to experience these benefits in their grain products, especially beer.

Echoing the views of Avinash Gorakshkar; Saurabh Jain, assistant vice president of research at SMC Global Securities, said, “The market is giving event discounts to all sustainable consumer products, including alcoholic beverages. With the fast approaching festival season, liquor sales, especially sales of high-end brands, are expected to head north. in this case, alcohol manufacturing companies are expected to get better business over the next few quarters and as a result their quarterly numbers are expected to remain up from the first quarter of fiscal 22 results. first quarter numbers from liquor companies were strong; their next quarter result should be stronger. “

Advice to investors to buy alcohol stocks in the short term; Sumeet Bagadia, Executive Director of Choice Broking, said: “One can buy shares of Radico Khaitan at the current market price for the short term objective of ??970 to ??1000 by maintaining the stop loss at ??890. United Spirits or McDowell shares can be purchased at the current market price for the purpose of ??780 to ??800 by keeping the stop loss at ??740 each. “

Disclaimer: The opinions and recommendations expressed above are those of individual analysts or brokerage firms, not Mint.

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