McDowell & Company Limited is planning an international listing of its shares in order to improve valuations. McDowell is the flagship of the Vijay Mallaya promoted United Breweries (UB) Group. It is India's largest and the world's fourth largest spirits company, with a portfolio of nearly 50 brands, 26 manufacturing centres and a strong distribution network. It controls 34% of the Indian spirits market and has a major presence in all product categories viz. whisky, brandy, rum, scotch, gin etc.
The company's latest plan comes in the wake of the announcement of a restructuring and growth strategy aimed at becoming the least cost producer in the industry. It has initiated a three-year capital expenditure plan for revamp and upgradation of its various distilleries. It has already invested Rs 190 m in the past year towards this plan. McDowell has also earmarked Rs 350 m investment for the next two years.
Whether the listing of the company's stock on international bourses will improve valuations, is yet to be seen. It will however, benefit the shareholders, as the listing will entail adhering to strict accounting and reporting standards, bringing in its wake greater transparency on the management's part. The move will also open international avenues for McDowell in raising capital, should the need arise.
Market view:
Some analysts have rated the stock as a 'Buy', based on the management's committed restructuring moves. The company's strategy of having a common game plan for all spirits companies in the UB stable has also gone down well with the market. The company's plan of international listing might generate more interest in the stock, in the hope that valuations will improve.
For the quarter ended March 2020, UNITED SPIRITS has posted a net profit of Rs 239 m (down 81.1% YoY). Sales on the other hand came in at Rs 64 bn (down 11.0% YoY). Read on for a complete analysis of UNITED SPIRITS's quarterly results.
Does the company with one of the fastest-growing QSR chains in India have sound prospects?
For the quarter ended December 2019, UNITED SPIRITS has posted a net profit of Rs 3 bn (up 34.5% YoY). Sales on the other hand came in at Rs 78 bn (up 0.6% YoY). Read on for a complete analysis of UNITED SPIRITS's quarterly results.
Here's an analysis of the annual report of UNITED SPIRITS for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of UNITED SPIRITS. Also includes updates on the valuation of UNITED SPIRITS.
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