10 Jun , 2025 By : Debdeep Gupta
Shares of United Spirits rose 2% on June 10 to hit a five-month high after a report said the firm's parent Diageo is looking to sell stake in IPL team Royal Challengers Bengaluru.
Bloomberg reported, citing sources, that the British distiller has been holding discussions with potential advisers as it weighs possibilities including a sale of part or all of the club, and may seek a valuation of as much as Rs 17,000 crore.
No decision is final and they may decide against selling the team, the report added.
At 10 am on June 10, United Spirits shares on NSE were trading 2% higher at Rs 1,626 apiece. The 52-week low of the stock is Rs 1,237 and 52-week high is Rs 1,700. The market capitalisation of the stock is Rs 1.18 lakh crore.
RCB was initially acquired by Vijay Mallya, whose Kingfisher Airlines Ltd folded in 2012 after failing to pay creditors. Diageo eventually took over RCB after buying Mallya’s spirits business.
RCB recently won the IPL for the first time by beating Punjab Kings by six runs.
Last month, United Spirits reported a rise in fourth-quarter profit, helped by strong demand for its premium alcohol brands and resumption of sales in the southern state of Andhra Pradesh in September after a five-year gap.
The Indian arm of spirits maker Diageo reported a standalone profit of Rs 451 crore for the quarter ended March 31, up 17% from a year ago.
The company said the net sales value of premium category, which includes Johnnie Walker whiskey and Tanqueray gin, rose 13.2% year-on-year, while overall net sales growth was 10.5%.
Recently, Citi issued a bullish call on the stock. The brokerage set a target price of Rs 1,800.
In its note, Citi expressed confidence in the company's growth trajectory, projecting a recovery in premiumisation trends over the next two to three quarters. The brokerage also highlighted the India–UK Free Trade Agreement (FTA) as a potential catalyst for driving further growth and premiumisation in the spirits market.
Adding to the optimism, JPMorgan had also issued a positive outlook on United Spirits recently. The brokerage upgraded the stock to 'Overweight' from 'Neutral' and raised its target price to Rs 1,760, up from Rs 1,415 earlier.
JPMorgan cited the company’s strong earnings performance and noted that its ‘Prestige and above’ portfolio holds promising growth potential. The firm also pointed to regulatory tailwinds in key markets like Andhra Pradesh, Uttar Pradesh, Madhya Pradesh, and Jharkhand, which are helping boost investor sentiment.
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