MUMBAI Deutsche Bank initiated coverage of United Spirits with a "buy" rating, citing it 53 percent market share in the Indian spirits market, the significant entry barriers to foreign players, and the benefits from its deal to sell a majority stake to Diageo.
The investment bank said Diageo Plc (DGE.L) would bring "much-needed financial prudence" to United Spirits Ltd (UNSP.NS), which should improve profitability and cash flows.
Deutsche set its 12-month price target at 2,700 rupees.
United Spirits shares were up 1.5 percent at 1,788 rupees as of 10:06 a.m.
(Reporting by Abhishek Vishnoi and Manoj Dharra)