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Although the benchmark index is trading flat for the day so far, one large cap is making some noise. The company is United Spirits Ltd (NS:) which is a well-known spirits brand with a market capitalization of INR 74,542 crore and trades at a TTM P/E ratio of 55.35.
The company’s Q1 FY24 earnings report was quite impressive as it reported a 10% YoY jump in revenue to INR 2,689.5 crore, however, the net income surged a whopping 79% YoY to INR 476.7 crore, translating into an EPS (earnings per share) of INR 6.71, compared to INR 3.75 a year ago. Regarding the shareholding pattern, FIIs have also increased their stake, from 15.38% to 15.92% in one quarter ending June 2023.
Image Description: Daily chart of United Spirits with volume bars at the bottom
Image Source: Investing.com
The stock is clearly in a strong bull run as it is not just trading at an all-time high but also above its 200-day simple moving average (SMA). This indicator is popularly used to determine the broader trend of the underlying security – bull or bear.
Also, the bull run has received a fresh push to the rally as the stock surged past its falling trendline resistance on the daily chart. This has signaled the end of the short-term correction that had been going on since 24 August 2023 and the resumption of the bull run.
Currently, the stock is trading 2.5% up at INR 1,057, by 11:21 AM IST and investors looking to add this counter to their portfolios can wait for a short dip to INR 1,045 which could be a good level for left-out traders. To curb the risk on the downside, a stop loss can be maintained below the recent swing low, at INR 997.
As the stock is trading at an all-time high, the upside levels are difficult to gauge, however, looking a the brief consolidation prior to the breakout, a level of INR 1,110 shouldn’t be an uphill task for the counter.
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Read More: How to Select High Momentum Stocks? A Practical Guide!
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