United Spirits gains after Nomura upgrade

Last Updated: Mon, Nov 26, 2012 04:50 hrs

Reuters Market Eye - Shares in United Spirits gain 3.3 percent after Nomura upgraded the stock to 'buy' from 'neutral' and raised its target price to 2,200 rupees from 675 rupees, advocating a structural re-rating after a deal with Diageo PLC .

The investment bank says that selling off treasury shares and preferential issue of shares to Diageo will bring in 33 billion rupees in the company which will help to pay debt and improve profitability.

"Despite the fact that the stock is up about 30 percent since the deal announcement on November 9, we believe investors should now buy UNSP as part of their core holding in Indian consumer stocks," Nomura said in a report.

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