IIFL Institutional Equities has maintained 'reduce' rating on United Spirits with a long-term target price of Rs 525. The reduced target price is 15 percent lower from the market price of Rs 617 per share, according to an IIFL research report dated September 11.

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Shares of United Spirits Ltd (UBL) quoted at Rs 610.90, down 0.56 percent on Friday on BSE at 2.10 pm. The stock opened at the day's high of Rs 619 per share. So far this year, the stock has corrected over 3.5 percent, while the one-year return on the stock is positive with the scrip gaining 6.5 percent.

USL on July 22 reported a 25.66 per cent jump in consolidated net profit to Rs 181.7 crore in the first quarter of 2019-20. The company had posted a consolidated net profit of Rs 144.6 crore in the year-ago quarter, USL said in a regulatory filing.

Consolidated total income during the period under review stood at Rs 7,296.2 crore as against Rs 6,678 crore in the corresponding quarter last fiscal, it added.

FY19 saw a sharp increase in Ebitda contribution from subsidiaries, rising from 1.2 percent in FY18 to 7.6 percent in FY19, the report said. This, however, was primarily led by improvement in profitability of the Indian Premier League subsidiary - Royal Challengers Bangalore (RCB) - and better profitability at the Pioneer Distilleries subsidiary, it further added.

The downside to the stock comes from risks to the key liquor business from weak demand, competitive pressures and input cost inflation, the report adds.

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