United Spirits loses fizz

United Spirits is amongst the top losers on the BSE currently, down over 4% intra day; since then it has recouped but remains over 2% lower. Volumes though are pretty muted at around 7700 shares only.

The sole reason for this stock slipping into the red is foreign brokerage, Citi. It has put out a report, wherein, it cut the target price of the stock from Rs.2645 to Rs.2347. The brokerage has stated that the company is not paying enough attention to the changes preferences for brands in the industry. It feels the company has been looking only inside, at its own margins, paying little attention to competitors who have become much larger, growing at a rapid pace.

Citi has also cut the overall industry volumes by 5-7% and expects growth to remain subdued in FY16 till FY18. With Maharashtra imposing drought tax, in the already existing environment of higher taxes and depressed consumer sentiments, Citi expects demand to be also weaken.