• OUTLOOK ARENA
  • VIEWS ON NEWS
  • SEPTEMBER 15, 1999

McDowell's new mantra -'improved valuations'

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.

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst)
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407