United Breweries Took A Spike After Couple Of Years; Is It A Bullish Sign For The Brewery Industry?
United Breweries Ltd is one such firm that has shed its past baggage and troubles and is now positioned for phenomenal growth in the following years
Due to increased home consumption during the pandemic, people became accustomed to the taste of costly wines and spirits. Customers are increasingly ready to pay a premium for boutique premium companies like United Breweries prioritising quality over quantity to provide a unique experience. Indeed, the fine dining culture has produced a major demand for alcoholic beverages, with a rising number of young folks gathering in clubs, bars, restaurants, and pubs.
Rapid urbanisation, changing customer tastes, an increasing middle-class population, and rising disposable money have all contributed to this. According to industry studies, India is the world’s largest whisky consumer, and the Indian alcohol market is quickly rising, with vodka and wine developing faster. Indian alcohol is mainly made up of Indian-made foreign liquor (IMFL), Indian-made Indian liquor (IMIL), beer, wine and imported alcohol. There is little question that the Indian consumer’s drinking habits are quickly switching, as evidenced by growing exposure to global brands and overseas travel, and hence the shares of this market is going to take the limelight in the stock market.
How United Breweries, one of the significant alcohol brand’s stocks, performed to support the backbone of the company?
The alcoholic beverages United Breweries has been consolidating in a 400-point range for the last couple of years, and the stock has recovered back after taking support at the lower end of the range in May on monthly charts, indicating that bulls are here to stay. Short-term traders with high-risk profiles are advised to consider acquiring the stock because the risk-to-reward ratio emerges beneficial for a bounce back towards the resistance level. It coincides with the horizontal support line and moving average, which have been serving as a support since 2011.
Since November 2021, the stock has been drifting in a range, with 1,800 as a significant barrier. On the downhill, 1400 served as a critical support. On the monthly charts, United Breweries’ stock price retested the support level of 1,400 in May 2021 before progressively rising higher in June and July.
The 1400-support level is also in line with the 50-month moving average. As a result, as long as the stock trades above this level, bulls should be able to make a return. According to analysts, the near-term aim is around 1700 levels.
The market achieved an all-time high with assistance from diverse industries like banking, real estate, automobiles, and FMCG. The FMCG sector had already reached an all-time high, followed by numerous other sectoral and strategic indicators that showed relatively positive performance. Beverages performed satisfactorily in the FMCG sector. Therefore, people having funds can make their bet on United Breweries.
The charm of Indian beverages pushes United Breweries’ stocks a step further.
The Indian beverage sector is worth roughly Rs 5.4 lakh crore and is predicted to more than treble in the next 10 years. IMFL alcohol is made in the United States and comprises beverages such as rum, vodka, brandy, gin and whisky. IMIL, on the other hand, are localised beverages that are manufactured and enjoyed regionally.
Feni, for example, is a famous Goan indigenous drink made from cashew or coconut. Similarly, Mahua is a popular native beverage in Odisha, Bengal, Jharkhand, and Bihar. The country’s liquor businesses are on a roll, with increased sales and profits expected in the future.
Conclusion.
United Breweries Ltd is one such firm that has shed its past baggage and troubles and is now positioned for phenomenal growth in the following years. For several weeks, the stock has been consolidating on the bourses, and investment managers and technical chart pickers predict the United Breweries stock to break out from its present level of Rs 1500 in the short to medium-term time frame. However, it is advised that before purchasing any stock, investors should conduct their due research and consult with their financial whizzes, as everyone has a different level of beverages to withstand the anticipated risk, if any.
After a thorough examination, the firm concluded that the business’s long-term development potential was intact, given that India is a hot country with a young population, fast urbanisation, and rising earnings. This gave United Breweries the confidence to do the right thing, which included keeping employees safe, engaging with customers again, controlling costs, preparing the organisation to increase consumption when the time arose, and ultimately defining the future of the Indian beer industry.
