>UNITED SPIRITS(NOMURA)

Investment Conclusion
We acknowledge the timing of the disclosures
leaves a lot to be desired and believe these issues
should have been highlighted earlier by
management. However, given the notional nature
of the losses and the possibility of a partial/full
recovery in the years ahead, we are not too
concerned about these developments and believe
the long-term value of the franchise remains
unaffected. Also, we do not believe the stock
deserves a de-rating owing to these developments
in the medium term. We expect the Street reaction
to die down in a day or two and believe investors
should use every fall as an opportunity to build a
position in the stock. We reiterate our BUY with an
unchanged target price of INR1,096.
Summary
􀂉 United Spirits reported a loss of INR4bn in its
recently announced audited and consolidated
FY09 results.
􀂉 However, the core business profitability is in line
with our estimates and the losses are on account
of: a) notional Fx loss, and b) mark-to-market
actuarial loss on pension liabilities in W&M
business.

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