RK Damani stocks: What should investors do with United Breweries, VST Industries—Here is what brokerage recommend

Two stocks in billionaire investor Radhakishan Damani's portfolio have come on the radar of brokerage house ICICI Direct. The brokerage firm has maintained a buy call on one of the stocks and recommended hold on the other.  

ICICI Direct has recommended a buy with a target price of Rs 1800 on United Breweries and suggested to hold VST Industries, the stock in which the celebrity investor marginally raised his position in the quarter ended March 2022, with target price of Rs 3425. The ace investor had added about 12,000 equity shares of VST Industries during the January-March quarter. 

The brokerage estimates 17% upside in United Breweries and 6% on Hyderabad-based cigarettes company VST Industries. The target price and estimates have been placed on the closing prices of April 27 and duration is 12 months.  

As per the corporate filings, RK Damani holds 1.2% stake or 3,195,834 equity shares of United Breweries and 4,993,204 shares aggregating to 32.3% stake in VST Industries.  

ICICI Direct on United Breweries 

As the company witnessed highest ever volume in March, 2022, the brokerage expects the momentum to continue in Q1FY23 (peak season for breweries). Also, UBL is expected to see normalised peak quarter after a span of three years, it underlined.  

"Due to long term growth story in the industry and a well-managed company with MNC parentage, we maintain our BUY rating on the stock," it said.  

ICICI Direct on VST Industries 

VST’s share price has underperformed the market with mere 6% return in last five years (from RS 3048 in April 2017 to Rs 3229 in April 2022), observed the brokerage firm.  

Though cigarette industry volumes have reached pre-Covid levels, we believe excessive duties, emergence of e-cigarettes & regulatory framework would keep volume growth in low-single digit in stable tax scenario, says ICICI Direct. "We continue to maintain our HOLD rating on the stock," it added.  

As per the latest corporate shareholdings, the billionaire investor publicly holds 14 stocks in the quarter ended March. As per trendlyne.com, the value of these stocks is estimated around Rs 170,926.0 core as on April 29